New coronavirus banking rules will allow for payment holidays and other measures
The Department of Trade and Industry has passed new regulations which will exempt certain categories of agreements and practices in the banking sector so that it may respond to the Covid-19 crisis, says minister Ebrahim Patel.
The exemptions will allow banks to work together to revise programmes and relief measures which will help small businesses, consumers and firms in distress, Patel said at a press briefing on Tuesday (24 March).
“In particular, the exemptions will enable the banks to coordinate on matters like payment holidays and debt relief for businesses and citizens subject to financial stress,” he said.
“(They will also allow for) limitations on asset repossessions of business and individual debtors and to coordinate on the extension of credit lines to individuals and businesses subject to financial stress.”
Patel said that the exemptions will also allow essential payment systems to continue to operate, including:
- The continued availability of banknotes to ATMs, branches and businesses;
- The continued provision of essential ATM, branch and corporate banking services;
- The continued provision of electronic payments systems.
“We have basically done extraordinary things to enable the banking system to remain strong an intact so that South Africans can access them over the next three weeks.”
Banks respond
A number of local banks have already committed to helping businesses and customers to cope with the impact of the coronavirus.
FNB says it is committed to help SMEs and individual customers whose financial position is adversely impacted by the coronavirus.
“The bank continues to work with the Banking Association of South Africa (BASA), in engaging with the SARB and Government on a variety of solutions aimed at supporting both consumers and businesses through these difficult times. We will make further announcements on the nature of this support in the days ahead,” it said in a statement on Monday (23 March).
Nedbank has announced a number of measures to help individuals and businesses hit by the coronavirus.
This support could include deferring payments (or part thereof) for a suitable period, extending existing loan periods or extending additional credit to manage short term cashflow shortfalls, the bank said in a statement.
“We are committed to supporting our clients during this time of uncertainty and have a number of solutions available to assist clients in good standing who are impacted by this pandemic,” it said.
Standard Bank has introduced new relief measures for businesses hit by the coronavirus – including a Coronavirus Business Interruption Payment Scheme which will provide payment relief to your business for 90 days.
Standard Bank said the scheme will launch on the 1 April 2020 and will support small and medium-sized business with a payment holiday.
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