The African National Congress Youth League (ANCYL) is calling for the withdrawal of Absa Bank's license following allegations that it was one of several South African banks involved in manipulation of foreign currency trading.
Secretary general Njabulo Nzuza on Friday said action had to be taken against the banks and said it showed the need for the establishment of a state bank.
"We must review and withdraw the banking license of Absa as a repeat offender. Fine all banks involved in collusion that resulted in the collapse of the rand. Speedily recover all monies owed by the banks resulting from apartheid bailouts from affected banks, the money recovered must be used to fund free education and youth development," he said.
Nzuza said it was the view of the ANCYL that before the end of the current calendar year, legislation allowing for the establishment of a state bank should be finalised. He said recent scandals in the financial sector proved that the financial sector in the country did not have the best interests of the country at heart.
The Competition Commission is investigating an alleged case of collusion and market allocation in the trading of foreign currency pairs involving the rand since April 2015.
The commission said it had discovered that the banks had agreed to collude on prices for deals for spot trades on trading involving US dollar/rand pairings.
"The banks are Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank NA, Investec Ltd, Standard New York Securities Inc, HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc, Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc (Respondents)", said the commission in a statement.
Nzuza said government must withdraw all funds kept with Absa and use a state bank as a primary banker and for the payment of social grants.
The league has been waging a fight with the bank since Public Protector Busisiwe Mkhwebane announced that Absa had to pay back R2.2 billion which was paid by the apartheid government as a bailout.