Banks ponder support for consumers

CAPE TOWN – The banking industry is divided on its approach to a payment holiday or debt relief as the sector yesterday announced steps it would take to provide support for consumers during the pandemic.

Payment holidays include an undertaking not to pursue aggressive debt collections and limitations placed on asset repossessions of debtors under financial stress.

The Banking Association of South Africa (Basa) met on Wednesday to thrash out a joint response to Covid-19 after Trade and Industry Minister Ebrahim Patel published an exemption notice in the Government Gazette on Monday (March 23), allowing collective discussions by banks on how to strengthen their response to the pandemic.

The exemption, drafted after consultations with the Competition Commission, enables banks to work together to lessen the impact of the disaster on businesses and private clients as well as placing limitations set on repossessions.

Basa said yesterday that its members had agreed “to do all in their power, while operating within the relevant regulatory frameworks, to responsibly support their customers and preserve the safety and soundness of our financial system”.