Cash Paymaster Services (CPS) CEO, Serge Belamant, says it would be impossible to pay social grant beneficiaries on 1 April if the contract with the South Africa Social Security Agency (Sassa) is not signed on Tuesday.
Belamant explains the cash cycle takes 12 days for the money to reach CPS.
He says the money moves from Treasury to Sassa, then to various banks, Absa, Nedbank and Grindrod, before it reaches CPS.
If you add all the days together, you find that for us to be ready and able to pay beneficiaries, takes 12 days.— Serge Belamant, Cash Paymaster Services CEO
However Finance Minister Pravin Gordhan gave Members of Parliament (MPs) a different explanation on Monday.
Three working days before the due date of payment, money is transferred by National Treasury to Social Development account held at the SA Reserve Bank. Social Development then transfers that money to nine provincial social development accounts also held at the Reserve Bank.— Pravin Gordhan, Finance Minister
Each of those accounts and money on those accounts is then transferred to a Nedbank account of CPS Net 1. All of this happens on the same day. Net 1 CPS pays that money from their Nedbank account into their Grindrod Bank. From the first of each month for a few days Grindrod pays beneficiaries in various forms.— Pravin Gordhan, Finance Minister
Belamant says Gordhan was ill-advised by someone.
Listen to the audio below to hear different explanations from Minister and CPS CEO, and Belamant defending CPS loans...