Banks must clarify fate of debt after expropriation – IRR
1 April 2021
The Institute of Race Relations (IRR) has asked the Banking Association of South Africa (BASA) to spell out its plan of action on settling mortgage bonds on expropriated property should the Expropriation Bill be passed in its present form.
In its letter to BASA today, the IRR asks how banks “will … settle outstanding debts on encumbered properties that are expropriated without compensation, or for compensation significantly below market value?”.
Land stands as collateral in approximately R1.6 trillion worth of debt and BASA’s submission to parliament warns that the Expropriation Bill in its current form could trigger a financial crisis by undermining the property rights upon which the capital-allocation system depends.