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High Court Strikes Down Postbank’s Challenge to End of SASSA Contract
A contract’s final days
In Pretoria, the Gauteng High Court has struck Postbank’s urgent application from the roll, effectively rejecting its effort to halt the termination of the Master Service Agreement (MSA) with SASSA. The contract is set to end on 30 September 2025.
To many, this marks the closing chapter of a long, turbulent partnership. The MSA began in 2018 when, following a Constitutional Court judgment that invalidated the prior cash-paymaster deal, SASSA turned to the Post Office (later Postbank) to distribute social grants.
Why Postbank took the matter to court
Postbank argued that ending the agreement would harm millions of social grant beneficiaries. It claimed the bank would face pressure to charge fees once its subsidised role ended. In July, Postbank formally raised a dispute against SASSA, and in September sought urgent relief.
The judge was unmoved. The court noted that Postbank had known since March 2024 that the contract would terminate in September 2025. The delay in launching its legal challenge weakened its position. The urgent application was therefore struck off the roll, with costs awarded to SASSA.
SASSA’s case and assurances
SASSA countered that many of the contract’s original functions, like cash pay points and over-the-counter services, had already been wound down. The agency maintains that it gave fair notice and that Postbank failed to engage effectively earlier.
In August, Social Development Minister Sisisi Tolashe told Parliament that grant payments for roughly three million Postbank clients would not be disrupted once the contract ends. She added that Postbank would continue to service accounts as a licensed financial institution.
Broader stakes and context
The end of this MSA reflects a wider shift. The collapse of the Post Office in 2023 and regulatory constraints imposed by the South African Reserve Bank have limited Postbank’s operations. Over time, many beneficiaries moved to mainstream banking institutions.
Now, with court challenges concluded, attention turns to implementation. Ensuring a smooth transition, especially for vulnerable communities, is critical. The ruling underlines how much of South Africa’s social grant system relies on legal, infrastructural, and political stability.
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Source: The Citizen
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