The Banking Association SA is concerned that certain sections of the proposed new legislation concerning lending and borrowing are poorly considered and badly craftedThe Banking Association SA interacted substantially with the trade and industry portfolio committee on the National Credit Amendment Act, which was gazetted this week.
The National Credit Act is of critical importance to us because banks grant almost 80% of new credit in the market. Banks have been involved in engaging the government on all legislation affecting the extension of credit, such as the original National Credit Act of 2005. In addition, due to the National Credit Act, in 2015 banks expunged R9.6bn across various credit agreement types. Banks continue to expunge sizeable amounts of prescribed debt on a monthly basis, in line with existing legislation and their own policies. In 2016, the annualised monthly prescription amount across the banks was R32.29bn. In 2017, the annualised monthly prescription amount across the banks was R30.926bn.
The implementation of new debt intervention measures should be seen in the context of the already extensive debt intervention afforded to consumers, both voluntary and prescribed, and should aim to assist those consumers not provided with similar, adequate relief. Furthermore, such measures should not introduce uncertainty or instability into the credit market, as this will have a further negative effect on consumers and the SA economy.
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