Social Development Minister Bathabile Dlamini wanted to discredit South Africa’s banks so that they would not be selected to dispense welfare grants, former SA Social Security Agency (Sassa) CEO Thokozani Magwaza told an inquiry on Friday.

Dlamini instead pushed for the illegal Cash Paymaster Services (CPS) contract to be extended.

''The minister approached me and told me I should find something against the banks so that the banks' option would not work... I said no,'' said Magwaza.

''Minister drove us towards CPS. Everything done was a push to remain with CPS... this initially started as an option of extending the contract, then it later moved to option of a wholly new CPS contract.''

Magwaza was telling the inquiry what Dlamini did to impede Sassa from meeting the April 1 2017 deadline to take over grants as instructed by the Constitutional Court. This, said Magwaza, was done by Dlamini through contentious and expensive work streams, her unwillingness to engage with the banks and pushing to prolong the CPS contract yet again.

However, Ishmael Semenya, for Dlamini, asked why the allegation against Dlamini on banks was not in Magwaza’s affidavit and why it was never raised by Magwaza's advocate Richard Solomons in his cross-examination of Dlamini last week.

''This is surely a damning allegation. This is a significant point to mention... you know what this sitting is about right? It is an inquiry to determine whether the minister should be compelled to pay legal costs....so it must be important to mention in your statement, am I right?,'' Semenya asked Magwaza.

Solomons interjected and said it was unfair to criticise Magwaza on aspects of Dlamini's cross-examination when there was a ruling that he was limited on what to put to Dlamini.

''You were very clear, Judge, that I had limited right of cross examination and should not go beyond what Mr Magwaza said in his affidavit. I confined myself to his affidavit... I don't think Mr Magwaza should be criticised for this and that said by the minister.''

Magwaza said his affidavit was based on what Dlamini penned about him in her own affidavit to the inquiry, and not much about what fell outside her written evidence.

The Constitutional Court-mandated inquiry into Dlamini’s role in the social grants debacle and whether she should be held liable for legal costs incurred resumed at the Office of the Chief Justice in Midrand on Monday. It is chaired by retired judge Bernard Ngoepe.

The grants crisis saw rights group Black Sash taking the department to the Constitutional Court to ensure that over 17 million beneficiaries continued to receive grants beyond March last year. The court had ruled in 2014 that the CPS contract was invalid but allowed it to run in order not to prejudice beneficiaries.

The Constitutional Court ordered that CPS continue to pay grants for a further twelve months, after it was found that Sassa was unable to meet the deadline of 1 April 2017 deadline to over grant payments.