CAPE TOWN – As black-owned businesses continue their struggle for financial aid from banks, while others experience the brutal closure of their bank accounts for no good reason, the banking ombudsman stressed they were there as a last resort and as a remedy. to investigate any possibility of unfair treatment.
The banking industry has since the start of the pandemic been accused of discrimination, seeing the collapse of several black businesses, but the Banking Ombudsman Services of SA (OBS SA) has argued that while banks are found guilty of any misconduct, there including discrimination, then the “OBS has the power to make things right.”
OBS communications manager Kwanda Vabaza said there are always opportunities for businesses to appeal and that OBS has jurisdiction to deal with complaints from small businesses, urging anyone who feels they have been unfairly treated to file a complaint with OBS for this complaint to be investigated.
“OBS will review complaints against banks of a small business, including complaints from a sole proprietor or merchant, legal person, partnership or trust, with a figure business less than R 10 million.
“Our role is to provide recourse to aggrieved customers of banks for losses they may have suffered, or could suffer, as a result of the poor administration of banks.
“As an OBS, we have the power to make things right and the appropriate recommendations to resolve the issue based on the facts of each case that comes before us.”
While independent media have received cases of discrimination currently under investigation by OBS, Vabaza said the ombudsman was keeping records of all complaints related to Covid19 relief that had arrived at their offices, but that their statistics did not distinguish between black and white, individuals or companies.
“Notwithstanding this, we can share with you that issues related to Covid-19 represented 3 percent of all of our complaints received in 2020, but our complaint subcategories do not specify whether the allegations were based on racism.”
He said the role of the OBS is also to determine whether the client’s loan application was received and reviewed on time by the bank and whether the application was denied, to see if the reasons for the denial of the application have been made. been properly communicated.
But: “Our office does not have the power / mandate to force banks to grant loan applications,” he said.
When asked if banks act unfairly in their service to black-owned businesses, he said banks never made a commitment not to make mistakes in providing services or providing services. products.
However, “our office, on a daily basis, investigates these complaints and in some complaints we found that there had been mismanagement on the part of the bank and appropriate recommendations were made to resolve the issues raised.
“Therefore, anyone who feels they have been treated unfairly by their bank can file a complaint with the OBS to have that complaint investigated.”
Entrepreneurs have questioned the process and rationale for banks refusing financial assistance, even if they are eligible, and abruptly closing bank accounts, but the Banking Financial Sector Regulation Act 2017 clearly spells out the requirements. principles and procedures which must be the moment of the refusal, the withdrawal or the closing of a financial product or a financial service.
A bank must be subject to applicable regulatory requirements, documents, adopt and implement processes and procedures relating to the refusal to provide a financial product or to render a financial service to customers.
This also applies to the withdrawal, termination or closure of a financial product or the withdrawal or termination of a financial service to customers.
However, these actions can only take place if the client receives reasonable prior notice of withdrawal, closure or termination, the act confirmed.
Meanwhile, as disgruntled customers and unions took to the streets of Sandton last month to protest racist banks, political parties are also calling on the banking ombudsman to apply tougher penalties on banks found guilty of any fault, in particular discrimination.
ANC MP and Chief Whip of the Western Cape Legislature Muhammed Khalid Sayed argued that the ombudsman treats these issues far too lightly and that they need to implement measures (sanctions) stricter with regard to banks.
As Sayed and EFF spokesman Vuyani Pambo argued over how the programs continue to be used to cushion the white economy, Brett Herron of the Good Party pointed out that access to the financing was the biggest barrier to entrepreneurship.
“The biggest obstacle for an entrepreneur to implement an idea and start a business is access to finance. Nothing else is as real a barrier to building a business and sustaining it as finance.
“Our governments continue to focus on small business advice bureaus, red tape reduction and ease of doing business indices. They focus on the wrong things, ”he said.
Investigations Unit – [email protected]