{"id":385375,"date":"2020-03-27T10:55:04","date_gmt":"2020-03-27T08:55:04","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=385375"},"modified":"2020-03-27T10:55:04","modified_gmt":"2020-03-27T08:55:04","slug":"south-african-banks-coronavirus-response-underwhelming-unions","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/385375\/south-african-banks-coronavirus-response-underwhelming-unions\/","title":{"rendered":"South African banks’ coronavirus response \u2018underwhelming\u2019: unions"},"content":{"rendered":"

South African banks are being criticized by labour unions and small business owners for not doing enough to help struggling customers as the coronavirus lockdown looms.<\/p>\n

\u201cThe response is quite underwhelming,\u201d said Matthew Parks, a parliamentary coordinator for the Congress of South African Trade Unions. \u201cThere are too many ifs and buts. It\u2019s hitting too few people. It\u2019s just more bureaucracy.\u201d<\/p>\n

Cosatu wants a \u201cbig bang intervention\u201d that will result in across-the-board loan deferments, said Parks.<\/p>\n

He leads the delegation of the nation\u2019s largest labour federation at the National Economic Development and Labor Council, a forum for the government, business and community members to discuss challenges facing the country.<\/p>\n

The lenders weren\u2019t allowed to hammer out a coordinated response until this week, when they received approval from antitrust authorities to work together.<\/p>\n

Customers who are\u00a0up to<\/span>\u00a0date with debt payments have been encouraged to call their banks for help if they\u2019ve run into trouble because of Covid-19, and a tailor-made solution will be found for them, Banking Association South Africa said in a statement on Thursday.<\/p>\n

Grant Ravenscroft, 51, who started Johannesburg restaurant Croft & Co. in 2006, recently moved to a bigger premises and found business started with a bang. But that has slowed right down as the number of infections in South Africa grew.<\/p>\n

Banks have been slow to respond to his requests for assistance sent about a week ago.<\/p>\n

\u201cIt\u2019s dire for many small businesses and I can\u2019t see three or six months down the line,\u201d he said. \u201cAs long as there is fear, people will stay away and so even after a shutdown, it\u2019s hard to know what it will look like.\u201d<\/p>\n

The approach by South Africa\u2019s commercial banks contrasts with stimulus measures around the world to use banks to keep greasing the economy\u2019s wheels. In\u00a0Turkey<\/a>, lenders offered customers relief from repayments for three months, and\u00a0up to<\/span>\u00a012 months for companies.<\/p>\n

\u201cYou need to look at this on a nuanced basis,\u201d said FirstRand Ltd. Chief Executive Officer Alan Pullinger.<\/p>\n

\u201cSome of our customers don\u2019t need any help, don\u2019t want any help and can happily continue to make their payments. They could even be irritated if we stopped the payments on their facilities. There are customers that may need help and we are reaching out to them.\u201d<\/p>\n

\u2018Different Scenario\u2019<\/strong><\/p>\n

In some other markets where mortgage payments were suspended, these were done with the backing of government\u2019s Treasury departments, which isn\u2019t the case in South Africa, he said.<\/p>\n

\u201cThat\u2019s obviously a very different scenario and it\u2019s easier for the banks to say \u2018we can offer help to all of our customers.\u2019\u201d<\/p>\n

Banks will be asked to step forward to help lift growth in the economy, which was in a recession even before the coronavirus spread, Pullinger said.<\/p>\n

\u201cThat means that the banks need to be in decent shape. We also need to manage our businesses in this period. We will look after customers but we also have to look after ourselves so that we can do our jobs when we get through it.\u201d<\/p>\n

Calls for more action come after a labor union known as Sasbo, which represents 73,000 banking employees, slammed companies for not informing staff on how the 21-day lockdown, which begins midnight Thursday, will affect workers.<\/p>\n

While Standard Bank Group Ltd., South Africa\u2019s largest bank, has offered small businesses and students a three-month payment holiday, its peers – including Absa Group Ltd. and Nedbank Group Ltd. –\u00a0 have urged customers to proactively contact them.<\/p>\n

Arrangements could include suitable payment deferrals, the restructuring of debt or the provision of small and medium enterprise bridging finance.<\/p>\n

\u201cWe will take all possible steps to assist customers in financial distress,\u201d Absa said in an email. Any meaningful cushioning of customers would likely flow from the collective effort of the banks as a \u201cfragmented approach would not go far enough.\u201d<\/p>\n

Nedbank is not going with a one-size-fits-all approach, the Johannesburg-based lender said.<\/p>\n

\u201cWe have received many calls and emails from clients enquiring about a wide range of payment arrangements,\u201d Nedbank said. \u201cDue to the increase in the numbers of requests at this challenging and difficult time, our response may be unintentionally delayed.\u201d<\/p>\n

\n

Read: Here are the measures South Africa\u2019s banks are putting in place during the coronavirus lockdown<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South African banks are being criticized by labour unions and small business owners for not doing enough to help struggling customers as the coronavirus lockdown looms.<\/p>\n","protected":false},"author":59,"featured_media":260439,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[961],"tags":[26],"class_list":["post-385375","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/385375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=385375"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/385375\/revisions"}],"predecessor-version":[{"id":385379,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/385375\/revisions\/385379"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/260439"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=385375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=385375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=385375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}