Regulations to be cleared for banks to play part in Covid-19 response

Minister of Trade, Industry and Competition Ebrahim Patel. Picture: GCIS
Minister of Trade, Industry and Competition Ebrahim Patel. Picture: GCIS

On the back of Standard Bank announcing a three-month debt repayment holiday for businesses and students in a bid to ease the impact of the Covid-19 coronavirus outbreak on citizens, Trade and Industry Minister Ebrahim Patel is due to promulgate new regulations that would allow for other financial services institutions to follow suit.

A highly placed person with intimate knowledge of the discussions said Patel would, at the earliest by tomorrow, gazette new regulations that would allow for “collusion” between the banks so that new intervention measures to mitigate the financial impact of the pandemic do not fall foul of the law.

“[The minister] will gazette regulations that allow sectors to collude as part of facilitating their contribution to the national response plan,” said the person.

The government has apparently received the buy-in of the big banks around these new regulations as “they are not demanding anything and we are coming together to save South Africa”.

According to reports, the Standard Bank offer is only available to small businesses with a turnover of no more than R20 million a year, whose banking accounts were also up to date.

The bank has also approved a payment holiday from April 1 to June 30 for student loan customers who are studying full-time.

Nedbank on Monday sent out a message to some of its clients regarding the “changed debit order mandate”, but it was not immediately clear whether the bank was following on the footsteps of its peers like Standard Bank.

This is a developing story.

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