President Salva Kiir has withheld his approval for the Agriculture Bank Bill, which the National parliament had passed into law in January.
This is because, Kiir says, the Bill failed to address mechanisms that will recover loans from those who default on their payments.
President Kiir also says he has not been given the authority to appoint a managing director and a deputy for the bank, as well as members of the board of directors.
Parliament is expected to review and debate the areas suggested by the president in the bill over the coming days.
The South Sudan Interim Constitution which was criticized for giving excessive powers to the President allows the president to dissolve the state legislative assembly and relieve elected governors.