<\/p>\n
Parliamentarians from different parties on Tuesday ripped into the country\u2019s banks, questioning their conduct, preferential treatment, lack of transformation, high fees, and arbitrary decision on closing accounts without reason.<\/p>\n
The South African Reserve Bank (SARB), its Prudential Authority Institute, the Banking Association South Africa (BASA), Financial Sector Conduct Authority (FSCA), Standard Bank, FNB, Absa, Investec, Nedbank, and Capitec attended the joint sitting of the standing committee on finance and trade, industry and competition portfolio committee to engage the finance sector on issues of transformation, and other related matters that are raised by consumers.<\/p>\n
MK Party MP Sanele Mwali said they wanted to raise concerns that the giants in the financial sector \u2018perpetuate unfairness and neo-apartheid systems of racist practices post-1994\u2019.<\/p>\n
\u201cWhy is it that the banks have not closed certain accounts for certain clients because they have taken steps to close certain accounts, to mention a few? We have seen that there have been companies with so much controversy in the financial sector for instance Tongaat, Steinhoff, and Glencor, they have been faced with so much controversy but they still have accounts with these major banks.<\/p>\n
\u201cBut, Sekunjalo and others have already faced their day in court because they\u2019ve already experienced a closure of their accounts. So what is of great concern is that what you do on the left is not what you do on the right.\u201d<\/p>\n
Mwali said this supports the notion that there is still discrimination within the financial sector.<\/p>\n
\u201cWhat you do with the ones with privilege is not what you do with the ones who are marginalised. This does not speak to the agenda of transformation and inclusivity.\u201d<\/p>\n
Speaking out on the arbitrary closure of bank accounts, Mwali said: \u201cThey just close your accounts without reason, or they just don\u2019t disclose everything they should be disclosing. Our people cannot even appeal this closure.\u201d<\/p>\n
He further appealed to the committee to review policies that would address the smaller banking institutions and not have them ruled within the same framework as the major banking institutions.<\/p>\n
MK Party MP Brian Molefe said urgent intervention is required to prevent banks from arbitrarily closing the accounts of clients without providing any reasons, and that he is concerned over the lack of a formal adjudication body to oversee such closures, warning that the practice is irrational and arbitrary.<\/p>\n
\u201cBanks cite laws that aren\u2019t even South African laws to justify their actions, yet no formal body exists to hold them accountable,\u201d he said.<\/p>\n
He further questioned the role of the BASA, arguing that the organisation has failed to ensure fairness and transparency within the sector.<\/p>\n
\u201cShouldn\u2019t banks be subjected to the highest standards, given their critical role in the economy? Why is there no requirement for written reasons when accounts are closed? Clients deserve transparency and legal recourse,\u201d said Molefe.<\/p>\n
Molefe called for urgent legislative intervention to regulate banking practices, arguing that banking is a public service and should be governed by laws that protect consumers from arbitrary and unfair treatment.<\/p>\n
\u201cSouth Africa cannot allow a financial sector that continues to serve only a privileged few while shutting out the majority from economic participation,\u201d he said.<\/p>\n
Molefe raised concerns about the continued dominance of the white minority in the financial sector, arguing that existing statistics mean little when banking practices remain exclusionary.<\/p>\n
\u201cThere is an unequal relationship between the banks and clients and yet legally banks can close bank accounts without justification,\u201d said Molefe.<\/p>\n
Molefe said that banking was a public service and should be held accountable on the basis that they were granted a banking licence by the state.<\/p>\n
\u201cNobody can function in South Africa without a banking account. It is a public service and right,\u201d said Molefe.<\/p>\n
EFF MP Omphile Maotwe, addressing the SARB, called for more robust banking policies, saying high bank charges and questionable ethics should no longer be entertained.<\/p>\n
\u201cWe as the EFF are bringing the nationalisation of SARB to Parliament and hope that it can be supported,\u201d Maotwe said.<\/p>\n
\u201cWe need a true monitoring policy. We can\u2019t have the Reserve Bank not playing a critical role. It cannot be that the Reserve Bank is only working on inflation.\u201d<\/p>\n
She said the party knows what SARB needs to do to re-industrialise the country.<\/p>\n
\u201cWe are making a call, as the EFF, that we need the formation of a state bank.\u201d<\/p>\n
She also criticised the FSCA and said the BASA was in the pockets of the banks.<\/p>\n
Maotwe stated the fact that the bank not only charges its clients for depositing, withdrawing, and a monthly fee was unnecessary, and the only people benefiting were in fact, the banks.<\/p>\n
Earlier, the parliamentary standing committee on finance chairperson Joe Maswanganyi said during his opening remarks that the country cannot afford a financial sector that excludes the majority outside the mainstream.<\/p>\n
He said engagement concerning access to development finance and the transformation of the South African financial sector was of paramount importance as it pertained directly to the foundational tenets of inclusive economic growth, equitable financial participation, and the broader transformation objectives enshrined in the Constitution and articulated in policy frameworks.<\/p>\n
\u201cReports from oversight engagements have illuminated deeply entrenched structural inequalities that continue to pervade the financial sector.<\/p>\n
\u201cIndicators related to black ownership, enterprise and supplier development and access to financial services for historically marginalised communities consistently fall short of established benchmarks.\u201d<\/p>\n
He said BASA along with individual banks must be held accountable for their shortcomings in transformation targets, \u2018especially regarding ownership, procurement and financial support for black-owned enterprises\u2019.<\/p>\n
\u201cIt is essential that banks articulate tangible commitments extending beyond mere corporate statements,\u201d Maswanganyi said.<\/p>\n
BASA representative, Bongi Kunene, told the joint meeting that none of the BASA members had been found wanting or guilty of racism.<\/p>\n
\u201cThe law and the code of good practices prohibit members from engaging in discriminatory behaviour.\u201d<\/p>\n
Kunene said that regulations were clear on discrimination and that the account closure processes were clear and BASA was not aware why the public did not know the processes followed when bank accounts were closed.<\/p>\n
\u201cIf a client disagrees, the client can invoke the intervention of the finance Ombuds. This is a question of financial education, and we all ensure that the public is aware of it.\u201d<\/p>\n
SARB head of policy, statistics and industry support, Olaotse Matshane, said questions over the mandate of the bank would be discussed by Reserve Bank Governor Lesetja Kganyago at a later stage.<\/p>\n
FSCA deputy commissioner Katherine Gibson said the authority should adopt conduct law to make it more streamlined and proportionate.<\/p>\n
\u201cIt\u2019s about using our supervisory tools to respond to challenges in the sector.<\/p>\n
\u201cOn transformation, we recognise our role as the FSCA that we can be playing and the stronger enabling law that can be provided in this case, and again we are supporting that through the Conduct of Financial Institutions Bill, National Treasuries Bill.\u201d<\/p>\n
kuben.chetty@inl.co.za<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
Parliamentarians from different parties on Tuesday ripped into the country\u2019s banks, questioning their conduct, preferential treatment, lack of transformation, high fees, and arbitrary decision on closing accounts without reason. The South African Reserve Bank (SARB), its Prudential Authority Institute, the Banking Association South Africa (BASA), Financial Sector Conduct Authority (FSCA), Standard Bank, FNB, Absa, Investec, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[17556,5917,5144,17557,880],"class_list":["post-230815","post","type-post","status-publish","format-standard","category-politics","tag-039why","tag-banks","tag-blacks","tag-differently","tag-treat"],"yoast_head":"\n