Fin24

Banks owed R1bn - report

2012-02-09 08:33

Johannesburg - South Africans owe banking institutions an estimated R1bn, the Banking Association of SA has said in court papers, according to a report on Thursday.

This debt was contained in more than 38 million credit accounts tallied by banks from January to September 2011, the association said in papers submitted to the Constitutional Court on Wednesday.

Beeld newspaper reported that the banking association asked the Constitutional Court to define the word "receive" for the purposes of section 129 of the National Credit Act.

Section 129 stipulates that creditors, including banks, have to notify debtors in writing that they are overdue and that legal action could follow.

For the purposes of this section, it was assumed that a debtor "received" a notification if the creditor sent it to the debtor's chosen address.

However, in practice many debtors did not receive the notice because they changed address after borrowing the money.

This situation prompted the Institute for Socio-Economic Rights (ISER) to ask the Constitutional Court to make a ruling that a creditor must be able to prove in court that a debtor had received a notice of arrears.

The banking association has countered that this would cost banks hundreds of millions of rand a year.

The association wants the case referred to a high court, to allow for testimony about the far-reaching, damaging consequences of changes to section 129.

 

Comments
  • Comrade - 2012-02-09 08:44

    The cANCer corrupt and miss-manage that amount EVERY MONTH ... whats worse?

  • Blane - 2012-02-09 08:46

    And how much went missing due to fraud and corruption last year ?

  • Jason - 2012-02-09 08:46

    Man United owe banks 800million pounds... R9Billion Rand do we really have a problem?

  • Blane - 2012-02-09 08:48

    And how much went missing last year due to fraud and corruption by the anc

  • Gordon - 2012-02-09 09:07

    oh dear, I almost cried in my cornflakes when I read this.

  • Derk - 2012-02-09 09:08

    can't the ANC pay it in full instead of writing off billion given to Cuba

  • Francois - 2012-02-09 09:23

    1bn is that all? Imagine the government just spend a little less on something and settled all our debt what a boost in the economy that would be.

  • Gerard - 2012-02-09 09:33

    Huh? So what? Isn't that what banks are for? Lending money and charging interest to make a profit instead of dreaming up millions of stupid little charges that do nothing to assist in asset financing, wealth creation and infrastructure development. Logic defied by a few bad debts!

  • Hugh - 2012-02-09 09:34

    One billion is very little exposure when compared to the overall debt.

  • Greg - 2012-02-09 10:13

    This is hilarious. Banks lend money they don't even HAVE and make a profit off of the interest. Nobody owes banks a single CENT as you NEVER had anything to back up the Paper or digits entered on your Computer screen in the first place. Banks are the biggest scam artists ever to exists as 99% of the population think they actually have the money to loan people. You'r not fooling me.

  • Sean - 2012-02-09 10:24

    This doesn't sound right. If 38 million credit accounts owe the banks R1 billion then this is an average of just R26.32 per account! I think the journalist that wrote this needs new glasses as it is more likely that the figure is R1 Trillion (an average of R26,315.79 per account).

      Glynn Smithers - 2012-02-09 23:03

      I agree with Sean - the maths is wrong - but if it were correct - it would be a great gesture on the part of the banks to write this small amount off and provide a huge stimulus to struggling consumers

  • nshinga1 - 2012-02-09 10:42

    I understand the banks position in regard to section 129. it would cost them more money which could be put to better use. Financial institutions are there to make money, not expenses which could be avoided.Should a debtor change his/her address, it is their duty to notify the bank. Just at they would notify the bank of change of address if they had money invested with the bank.

  • Konstabel - 2012-02-09 12:48

    The banks should only be responsible to deliver written notice to the address provided by the client. If the client no longer resides there and has not provided the bank with a new address then the bank should be allowed to consuider the notice as delivered. People should not be able to run away from their debt and make it the banks problem to find them.

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