WINDHOEK – Following serious allegations of interest rate discrimination by First National Bank in South Africa, the Bank of Namibia says it is not aware of any discriminatory rules applied on banking products by any local banking institution. However, the central bank advised any clients who feel aggrieved in this regard to refer such complaints to the Bank of Namibia without delay.
“It is important to emphasise that although some Namibian commercial banks are partly owned by South African banking groups, they are first and foremost separate legal entities, incorporated in Namibia in a different jurisdiction. Therefore, what happens in South Africa cannot be assumed to automatically have spilled over to Namibia,” said Bank of Namibia’s Deputy Director: Corporate Communications, Kazembire Zemburuka.
Responding to questions from New Era, Zemburuka noted that generally, from a regulatory perspective, it is established that pricing structures of commercial banks’ products and services is primarily based on the risks associated with some clients or loan applicants informed by credit evaluations and affordability assessments carried out by the commercial banks.
The allegations against FNB South Africa were brought to the fore by a private financial consultant in that country, Emerald Van Zyl, who has been waging a legal fight against South African banks for more than a decade. Van Zyl alleges that more than 4 000 South African bank customers were charged 30 percent or more on their home loans. South African media reported that Van Zyl described the revelations as the biggest interest and coverup scandal in the history of African banking, claiming that the South African Reserve Bank, SA Banking Ombudsman’s Office, the SA Standing Committee on Finance in Parliament and the SA Human Rights Commission are aware of this but fail to act.
Lee Mhlongo, the CEO of FNB Home Finance in South Africa, said the bank’s view on the allegations are that they are “reckless, baseless and extremely hurtful to the 46 000 odd people” working for the institution.
“FNB has taken note of news reports around the Equality Court case that was initiated in 2013 on behalf of three individuals who took out home loans with Saambou. The Bank categorically refutes the baseless and appalling allegations of racial discrimination on this matter and is defending the case before the Equality Court. The Bank further confirms that allegations of racial discrimination, which are now before the Equality Court, were resoundingly dismissed in 2013 by the North Gauteng High Court and subsequent appeal was also dismissed in the High Court and Supreme Court of Appeal,” reads a statement by Mhlongo.
He further noted that the claims were dismissed with punitive costs in favour of FNB and explained that the matter dates to 2002 when Saambou was placed under curatorship and FNB subsequently took over the administration of the home loan book. “After a review of the Saambou home loans, FNB announced its decision to act on behalf of exSaambou customers who may have been charged incorrect interest. FNB undertook to recalculate the approximately 80 000 Saambou home loan accounts that could have been affected by the interest calculation method used by Saambou,” said Mhlongo.
“In May 2006, FNB completed the recalculation and some 50 000 customers qualified for a refund as result of the incorrect interest charged by Saambou. The interest of the remaining 30 000 home loan customers was calculated correctly and required no adjustment to their accounts. In June 2006, FNB offered refunds totalling R154 million to ex-Saambou customers who had impacted home loans,” Mhlongo clarified.