African Bank - National Credit Regulator's interventions raise more questions than answers

4 September 2014

A reply to questions posed by the DA to South Africa's National Credit Regulator (NCR) raises concerns over the regulator's interventions relating to poor lending policy at African Bank, despite supposed early detection. 

This comes at a time when the Reserve Bank of South Africa has elected to establish a commission of inquiry into African Bank's multibillion-rand collapse and which could open the door to criminal proceedings or sanctions against the bank's management and directors.

According to the NCR's reply, problems at African Bank were detected as early as 2011 after the receipt of complaints from consumers. 

In 2012, the NCR came into possession of all credit agreements concluded by African Bank during certain periods between 2010, 2011 and 2012, giving the regulator the opportunity to inspect the affordability assessments conducted in relation to loans extended by the Bank and thus also it the opportunity to detect problems at the regulator - and taken steps to mitigate loses. 

It is also evident from the NCR's response that the Ministry of Trade and Industry was notified of problems at African Bank in 2012.

What is yet to be determined, is what steps were taken to address problems at African Bank as soon as they were detected? We have submitted questions in this regard. 

It also remains unclear as to when the NCR informed the South African Reserve Bank of problems at African Bank. 

All in all, the NCR's response raises more question than it answers. 

The DA will be re-submitting further questions to the both the NCR and the Department of Trade and Industry requesting that -

Both institutions provide details on what interventions were taken to mitigate poor lending policies at African Bank; and

Detailed reports of relating to the investigations conducted by the NCR into the affairs of African Bank be provided for full scrutiny.

The DA will continue to monitor the situation closely seeks answers to events at African Bank. 

Statement issued by Dean Macpherson MP, DA Shadow Deputy Minister for Trade and Industry, September 4 2014

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