Cash problems for South Africa as banks warn of extensive damage

The destruction of bank branches and ATMs in KwaZulu-Natal and Gauteng, and threats to the safety of bank employees, will have a direct impact on thousands of South Africns, says the Banking Association of South Africa (BASA).

Banks and their staff are an essential part of our country’s economic infrastructure and provide vital services to the communities in which they operate, the group said.

It added that the destruction of branches and ATMs hampers the ability of South Africans to draw their salaries and make payments for their daily needs, and for businesses to operate and pay their staff and suppliers.

“When bank operations are forced to close and services are suspended to protect employees from violence, it is the most vulnerable in our communities who suffer most. Many child support grants, pensions and other social security grants are accessed through the banking system.”

Extensive damage

BASA said that banks are now assessing the extent of the damage done to this vital social security and economic infrastructure.

However, it is already clear from the magnitude of the destruction that it will take many weeks before the hundreds of ATMs that have been destroyed can be returned to service, the association said.

Services have been further disrupted by the destruction of many retail outlets, which often also serve as cash points, especially in outlying areas.

“In the meantime, banks will do what they can to continue providing financial services and assist with the payment of social security grants.

“It will cause near-immediate suffering and distress if many of the 11.5 million South African Social Security Agency (SASSA) beneficiaries, who use ATMs and other point-of-sales devices, are not able to collect their grants.”

At a time when many South Africans are facing severe economic hardship, banks continue to play a critical role in providing financial relief and social stability, Basa said.

The destruction of branches and other networks that allow banks to reach their customers, as well as the cost of replacing infrastructure, will hamper these efforts, it said.

“Without a swift return to political and social stability and respect for the rule of law, South Africa will be unable to recover from the economic ravages wrought by years of poor governance and maladministration and exacerbated by the devastating impact of the Covid-19 pandemic.

“The looting and destruction of property in KZN and Gauteng are criminal acts that undermine the welfare of all South Africans.

“Banks support the actions announced by President Ramaphosa to put a stop to the violence and vandalism, restore security and ensure that perpetrators are brought to justice.”

No cash flow

On Monday (12 July), The Fidelity Services Group said it will cancel some cash-in-transit operations amid public violence and unrest in KwaZulu-Natal and Gauteng.

Chief executive Wahl Bartmann said to protect their people and safeguard assets, Fidelity has recalled its cash-in-transit vans from the affected areas.

“We are aware of the pressure being felt by many of our commercial customers, particularly our retail customers, who are at high risk of ‘mass looting’,” he said.

“From the chaos in KwaZulu-Natal, we have seen a lot of rioting on the roads, fires, extensive property damage and looting, which has spread to many other areas.”

Bartmann said that some staff had also been injured during the public violence.

“The situation is, however, extremely fluid, and we are monitoring activity closely with all law enforcement officials. We are trying to support everywhere we can, but the situation is very violent, and a number of our staff have already been injured.”

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Cash problems for South Africa as banks warn of extensive damage