A summary of this committee meeting is not yet available.
TRADE & INDUSTRY PORTFOLIO COMMITTEE
1 March 1999
HEARING OF EVIDENCE ON INCREASE IN BANK TRANSACTION CHARGES & ACTIVITIES OF SMALL LOAN ORGANISATIONS
Hearings on bank charges, micro lenders and consumer protection were held to address public concern about the high interest rates charged by banks and unscrupulous money lenders.
Mr Alistair Ruiters, of the Department of Trade and Industry told the committee that the majority of South Africans did not have access to the banking system. They were being excluded and often had to use unscrupulous money lenders instead.
The banks seemed only interested in the well-off sector of the community and did not want to operate in the poor areas and forced people to use ATMs and increased their charges. Consequently the poor could not obtain credit through the banks for home loans or pass money through the banking system. One needed to have a minimum deposit in order to open an account.
Mr Bruce Cameron of Independent Newspapers is the editor of the Personal Finance supplement in the Argus. He was extremely critical of the profiteering of the banks which are taking advantage of the public with exorbitant rates. He called on the government to force the banks to offer a more competitive service. Banks did not have clear cut charges. Often what you were charged was not what you had been told. He said the banks could not stand criticism. After running a critical article in his paper, for example, one main banking group withdrew its advertising from his paper.
Recent surveys showed that the banks seemed to have a policy to exclude lower income groups by levying excessively high charges. He called for regulation in this sector and for action to be taken against loan sharks who may charge 12% more than the ordinary rate.
Mr Motale, a business man from the Eastern Cape, spoke about his own difficulties with the banks in financing his business, Motale's Bus Services. From 1989 he had had problems with the bank and he gave First National as an example. With documentation enclosed he showed that with a concerted effort over some years he got some money back after being overcharged by R120,000 in six years. Because of this situation he got into difficulty and had to retrench his workforce.
The Chairman said all these individual cases would be referred to the Banking Ombudsman for investigation. The committee will have to advise on the correct procedure.
Mr F Brink, an economist from the National Maize Producers Organisation spoke to his document. The main thrust of his presentation was in line with the others. Transparency was needed in disclosing interest rates. Farmers needed to borrow heavily for new machinery etc. and needed to have proper interest rates in front of them so they understand their liability.
Mr B Skinstead of Durban had a construction business in Margate. He told the story with substantial written proof of a long saga with the Standard Bank which had put him out of business, taken him to court and had him blackballed.
Note: The afternoon session of the hearings was not monitored.
No related documents
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.