The South African Registrar of Banks has given the go-ahead for Discovery, South Africa’s medical scheme operator and financial services group, to operate a retail bank.
The firm announced on Monday that NewDisc Limited (to be renamed Discovery Bank Limited) has been granted a banking licence in South Africa by the Registrar in terms of Section 17(1) of the Banks Act.
The company plans to operate a retail bank to be known as Discovery Bank by 2018.
Discovery also informed investors that the granting of the banking licence is subject to specific regulatory conditions, including conditions relating to the proposed shareholding in the Bank and Competition Commission approval.
“Discovery awaits the Competition Commission’s final response and is in the process of assessing the implications of the conditions. Shareholders will be informed of further developments and progress in the development of Discovery Bank Limited when appropriate,” the company said in a statement.
The new bank will compete in a highly competitive market with the “big five” banks – Standard Bank, Capitec, Absa, First National Bank and Nedbank.
It will also compete with TymeDigital, an online lender in which mining businessman Patrice Motsepe owns a stake, which was recently awarded a banking licence.
In August, Motsepe’s investment firm African Rainbow Capital (ARC) acquired 10% stake in TymeDigital through the Commonwealth Bank of Australia.
The aim is to establish a black-owned, black-controlled bank in the country.
TymeDigital has a 10-year partnership with retailer Pick n Pay to develop points of presence at its stores to expand the bank’s reach.