South African banks face scrutiny over political account closures

IOL News

9 hours ago

SA's big banks' trade policies in the spotlight
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Regulators have been warned against approaching complaints about South African banks in the same way as US president Donald Trump, who this week issued an executive order after accusing financial institutions of unacceptably restricting law-abiding individuals and businesses' access to banking services based on political or religious beliefs.
Mametlwe Sebei, president of the General Industries Workers Union of SA (Giwusa), an affiliate of the SA Federation of Trade Unions (Saftu), said Giwusa would not support merely implementing moves similar to Trump's as the situation required the same interventions but for different reasons.
Sebei said moves against the banks for being reactionary and assaulting human rights must be supported.
"We also know that banks are not accountable in this country, there are political parties, trade unions, community organisations whose bank accounts were closed without an adequate explanation," he said.
Sebei described banks as untransformed and that there is not much to look into as far as the banking industry and its conduct are concerned as many South Africans have suffered a lot.
He said even Giwusa recently had a dispute with one of the country's major banks, which gave some members access to the union's accounts without authorisation and there were no adequate explanations.
According to Sebei, companies perceived to be close to certain public figures have had their bank accounts closed without explanation.
"When they close bank accounts, they are effectively condemning workers in those companies to unemployment, retrenchments and job losses. You cannot destroy a company to punish the owners," he said.
Sebei said the idea that private banking institutions can take political decisions is extremely dangerous and that is why this should be strongly regulated.
In addition, he said the law already provides for instances where there is suspicion of misuse of banking facilities by a client that is able to be reported to the authorities as provided for in the Financial Intelligence Commission Act.
Sebei added that the current laws can be implemented without jeopardising jobs and the livelihoods of workers.
"Financial services are a lubricant by which the economy is working, it has enormous power in society and in the economy that can destroy not only individuals but also companies and whole industries. These people are wielding enormous public power that has been privatised into institutions that are guided by profiteering and nothing else and want to exercise this power without transparency, accountability and even pass political judgment and that for me is deeply troubling," he said.