Parliament, Friday, 17 January 2025 – The Portfolio Committee on Trade, Industry, and Competition as well as the Standing Committee on Finance will meet with the major banks in February to understand their credit lending practices for production and consumption purposes as well as progress in contributing towards transformation of the economy.
The Chairperson of the Portfolio Committee on Trade, Industry and Competition, Mr Mzwandile Masina, said: “The meeting would be a fact-finding mission informed by observations made by the two committees following their meeting with the National Credit Regulator, National Treasury, and the Competition Commission late last year.”
The Banking Association of South Africa and the major banks including ABSA, Capitec, FNB, Investec, Nedbank, and Standard Bank have since confirmed their attendance. According to Mr Masina this engagement forms part of enhanced oversight over the financial sector and the developmental role they should fulfil in South Africa. It has been observed that it is easier to secure credit for consumption purposes than for production.
Mr Masina said this lending approach is disempowering, particularly for previously disadvantaged people. He also said: “As Parliament, we have a constitutional duty to conduct oversight over the implementation of legislation in the interest of consumer protection and facilitating transformation. Banks, as regulated entities, should be open and fair about their lending practices, in particular, the calculation of interest, confidentiality clauses and the fine print on credit agreements.
“We invited the banks to engage them on issues that negatively affect ordinary and vulnerable members of society,” he added. “It would be ideal if the banks worked to advance and support economic development across all segments of society,” Mr Masina continued.
“The meeting is to ensure that the banking sector in South Africa is open, transparent and of service to poor people to facilitate inclusion in the productive sectors of the economy. We have a responsibility as members of Parliament to oversee the sector to ensure inclusive economic growth and to protect vulnerable consumers,” concluded Mr Masina.
In addition, the committees will be inviting the Financial Sector Conduct Authority to discuss the state of banking in South Africa, the credit profile within the sector, ratios of consumption credit versus productive credit per bank, bank charges, state savings, and the Protection of Personal Information Act (POPI Act) as it relates to confidentiality of clients. Furthermore, the committees will be discussing the expected impact of the Conduct of Financial Institutions (COFI) Bill on lending practices, as well as the progress in implementing the Financial Sector Charter.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON TRADE, INDUSTRY AND COMPETITION, MR MZWANDILE MASINA.
For media inquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Mr Sibongile Maputi
Cell: 081 052 6060
Email: smaputi@parliament.gov.za
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