Latest news with #overdraft
Mail & Guardian
13 hours ago
- Business
- Mail & Guardian
Standard Bank launches Southern Africa's first Shari'ah-compliant overdraft
Africa's biggest lender, Standard Bank, has launched the first-ever Shari'ah-compliant overdraft facility in Southern Africa, marking a transformative milestone for Islamic Finance on the continent. Designed to empower business owners with more Shari'ah-compliant solutions, the product adds to a long list of Standard Bank's innovative solutions to meet the unique needs of Africa's growing demand for Islamic Finance. Structured under the Shari'ah principle of Wakaalah, the Shari'ah Overdraft facility is a non-interest based alternative that provides businesses with instant access to short-term funding. Linked to the Shari'ah Business Current Account, the new product will allow clients to drawdown up to a pre-approved limit. 'This is not just a product launch, it's a response to a critical gap in Africa's Islamic Finance ecosystem,' said Ameen Hassen, Head of Shari'ah Banking at Standard Bank. 'For too long, businesses that required Shari'ah-compliant financing options lacked fluidity of a working capital solution that an overdraft brings. This overdraft facility empowers entrepreneurs to manage cash flow fluctuations without compromising their values and need for Shari'ah compliance.' With Sub-Saharan Africa home to 18% of the global Muslim population but accounting for just 1% of worldwide Islamic Finance assets, Standard Bank's innovation arrives as the region seeks scalable, Shari'ah-compliant solutions. The overdraft facility will directly address working capital challenges faced by businesses. Key benefits of the new product include: Competitive market related pricing. Direct linkage to the Shari'ah Business Current Account for streamlined operations. Certified compliance: The facility is certified by Standard Bank's Shari'ah Advisory Committee. Not only for Muslims While Shari'ah Banking adheres to Islamic principles like Wakaalah bi al-Istithmar (agency-based investment), and the prohibition of interest (riba), Hassen said the bank's offering transcends religious boundaries, with approximately 35% of Standard Bank's South African Shari'ah clients identifying as non-Muslim. 'This isn't just for Muslims, it's for anyone seeking transparent, non-interest, asset-based or backed financial solutions,' said Hassen. The launch builds on Standard Bank's legacy of Islamic Finance innovation, including the world's first Shari'ah-compliant Diners Club product and South Africa's inaugural Shari'ah tax-efficient endowment. 'Africa's economic future hinges on inclusive, innovative finance,' said Hassen. 'With this product, we're not just serving clients, we're innovating, industrialising and advancing a system of finance rooted in tradition and shared prosperity.' To leverage this Shari'ah-compliant liquidity facility, businesses and individuals can contact their Standard Bank Relationship Manager or email
The Sun
18-06-2025
- Business
- The Sun
Lloyds, Halifax and Bank of Scotland to make BIG change to account fees in boost for millions – are you affected?
LLOYDS, Halifax and Bank of Scotland are making a big change to account fees in a matter of days. Millions of Lloyds Banking Group customers will see their overdraft costs fall, The Sun can reveal. 1 An overdraft allows you to borrow money through your bank account when your balance drops below zero, up to an agreed limit. Lloyds, Halifax, and Bank of Scotland are now reducing overdraft rates for millions of new and existing customers. For new customers, all overdrafts will come with a 29.9% representative rate. At the same time, millions of existing customers currently paying 39.9% or 49.9% on their overdrafts will have their rates reduced to 29.9%. This comes just months after the banking giant, which also owns Halifax and Bank of Scotland, revamped its overdraft interest rates. In January, Lloyds introduced four overdraft tiers - 19.9%, 29.9%, 39.9% and 49.9%. Customers were given a rate based on their credit history - those with good credit got lower rates, while those with poor credit got higher ones. As a rule, new customers signing up for a Lloyds Bank overdraft used to be offered a 39.9% representative rate. These new rate changes, which will be coming in over the next few days, could save borrowers hundreds of pounds in interest each year. For example, if your interest rate dropped from 49.9% to 29.9%, the cost of borrowing £1,000 over 12 months would fall by £299. CARD REFUNDS: Section 75 versus Chargeback Meanwhile, if your interest rate falls from 39.9% to 29.9%, the cost of borrowing the same amount over 12 months would fall by £100. A Lloyds Bank spokesperson told The Sun: "We know many customers find it helpful to have an overdraft there for life's unexpected costs and, to make that as affordable for our customers as possible, we're lowering the interest rate most customers typically pay when they use an overdraft. "This means the cost of using an overdraft will become cheaper for many, with Lloyds, Halifax and Bank of Scotland now offering one of the lowest representative overdraft rates on the market." Lloyds said it will contact affected customers in the coming days to explain the changes. Customers whose interest rates are decreasing will receive seven days' notice. Think before you borrow BORROWING sounds like a simple way to help pay bills – but beware falling into debt you cannot pay back. It's always vital to ask yourself if you actually need to borrow before committing to a new credit card, personal loan or overdraft. If you cannot afford to pay off debt you already have, you should avoid at all costs taking on any more. What are the alternatives to overdrafts? Depending on individual circumstances, some borrowers may find it more cost-effective to use alternatives to an overdraft, such as a credit card with a 0% interest period. These cards, called balance transfer cards, let you move existing debts to the new card and avoid paying interest on them for a certain period. The leading card on the market right now is from NatWest, which offers an impressive 34-month 0% balance transfer deal, though it comes with a 3.49% transfer fee. However, applicants should note that this deal isn't guaranteed for everyone. Tesco Bank is close behind with a 33-month 0% interest offer and a slightly lower transfer fee of 3.19%. Some people may also have savings they could turn to, rather than help clear their debts. Ideally, you will have built up an emergency fund which you can dip into — but sometimes that just isn't possible. Before you borrow cash, do your research to find out the cheapest option for you. And remember to speak to your bank as lenders must help if you're in financial difficulty. If you're looking for a more affordable way to borrow, a loan from a credit union is worth considering. Credit unions are a much cheaper alternative to payday loans, and some can even provide funds on the same day. Their interest rates are significantly lower than those of credit cards or overdrafts, ranging from 12.7% APR (1% per month) to a maximum capped rate of 42.6% APR (3.5% per month). How to get free debt help There are several groups which can help you with your problem debts for free. Citizens Advice - 0800 144 8848 (England) / 0800 702 2020 (Wales) StepChange - 0800138 1111 National Debtline - 0808 808 4000 Debt Advice Foundation - 0800 043 4050 You can also find information about Debt Management Plans (DMP) and Individual Voluntary Agreements (IVA) by visiting or Speak to one of these organisations - don't be tempted to use a claims management firm. They say they can write off lots of your debt in return for a large upfront fee. But there are other options where you don't need to pay.
Yahoo
26-05-2025
- Business
- Yahoo
Ramit Sethi: 4 Ways Your Bank Is Hurting Your Wallet
You might want to think twice the next time you leave money in your bank account. Learn More: Check Out: Ramit Sethi, entrepreneur and bestselling author of 'I Will Teach You to Be Rich,' explains four ways that your bank is ripping you off and what you can do to protect yourself. Banks may introduce you to a high 4% interest savings to lure you in, Sethi said, but you need to read the fine print. That rate is often capped and drops to their normal rate after a few months, while your bank is still lending out that money at high interest rates. Consider This: Sethi reminds customers that banks make billions of dollars but still charge you a monthly maintenance fee for the privilege of keeping your money with them. You can face thousands of dollars of hidden bank fees in a year without even noticing. Read Next: Sethi calls large overdraft fees 'one of the biggest scams in banking.' Banks silently approve your overdraft and then silently charge you say, a $35 overdraft fee and so forth. One overdraft fee can wipe out your entire interest for the entire year. In 2023, banks made almost $6 billion from overdraft fees, said Sethi, preying on people with low-incomes, living paycheck by paycheck, not checking their account balances or assuming banks protect them. Banks don't treat everyone equally poorly, said Sethi. Black and Latino borrowers are charged higher mortgage rates even with the same credit profile as white or Asian borrowers. Furthermore, minority-owned businesses are more likely to be denied loans. Sethi says when you control for credit score, income and financial history, that bias does not go away. If you get hit with a fee, call your bank and ask for a waive. Banks know that the vast majority of people don't call and raise the concern, Sethi says, and as complimentary courtesy they will deal with you. Think of big banks as a bus station: 'Your job is to get your money in there and then get it the hell out,' said Sethi. 'The less you leave sitting there, the better.' Instead, keep your emergency savings in a high-yield online bank. For your investments, invest in a target date fund or index funds (low cost, long-term investments). Sethi says switching to a better bank is the single biggest move that you can make. Don't be 'nostalgic' over your old history with your bank, he said. More From GOBankingRates How Far $750K Plus Social Security Goes in Retirement in Every US Region Sources YouTube, 'The Bank Fees Costing You Thousands (And How to Escape).' This article originally appeared on Ramit Sethi: 4 Ways Your Bank Is Hurting Your Wallet
Forbes
14-05-2025
- Business
- Forbes
Credit Scott, Hill, And Trump For Nullifying Harmful CFPB Regulations
US Senator Tim Scott, Republican of South Carolina, speaks during a US Senate Committee on Banking, ... More House and Urban Affairs hearing about recent bank failures on Capitol Hill in Washington, DC, May 18, 2023. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images) This week, President Trump signed two Congressional Review Act resolutions nullifying bad Biden-era Consumer Financial Protection Bureau regulations. The signing caps the efforts led by Senate Banking Chairman Tim Scott (R-SC) and House Financial Services Chairman French Hill (R-AR). The CFPB will not be able to issue 'substantially similar' rules in the future, and this trio (and their staff) deserves credit for delivering the win to millions of Americans. The first CRA resolution nullifies the CFPB's overdraft rule, a regulation that would have imposed price caps on overdraft fees. As Senator Scott pointed out in March, price caps would have reduced a service millions of people find valuable and kept more people out of the banking sector. Price caps prevent companies from earning the profit they need to provide products and services to customers. As a result, companies stop providing those services and/or charge other people higher prices. Either way, they lessen people's ability to make their own choices. Price caps are also anticompetitive because they remove the incentive for other companies to provide similar services. This feature lessens consumer choices, too, but it also suppresses employment opportunities. It makes the free enterprise system less productive and beneficial. The CFPB's rule was a classic case of bureaucrats deciding that prices were 'too high' and then implementing a 'solution' that would have made the situation worse. In no time, politicians would likely have been spinning the results as a 'market failure,' justifying more regulation, even though the government would have been preventing the market from working in the first place. The second CRA resolution nullified a rule that would have expanded the CFPB's oversight authority in digital consumer payments. (Formally, it was the Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications rule, a bit of a mouthful.) Arguably, this rule was little more than the Bureau's attempt to regulate companies like Google and Apple because, well, that's what regulators do. They regulate. And when they don't have enough to regulate, they find more to regulate. Regardless, the proposed rule unequivocally failed to justify new regulation or even identify any specific risks posed to consumers by popular digital payment apps. The rule did not identify any consumer harm, much less a market failure. Indeed, the digital payment app universe has been a success story, and the rule essentially said, 'Congratulations on your successful business ventures; now we're going to make your lives miserable.' That's not how a free enterprise economy works, it's how a government kills one. Even fans of limited government concede that government has a legitimate role in mitigating fraud and rectifying true market failures. But regulating for the sake of regulating is counterproductive, and the existing framework already goes way beyond policing fraud and consumer harms. Obviously, the United States has reached a regulatory saturation point, and financial markets are just one great example. Financial regulations are complex and voluminous. They sustain the careers of some of the best-paid lawyers and lobbyists in the nation. They're enforced by, among others, the Federal Trade Commission, the Securities and Exchange Commission, the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Federal Housing Finance Agency. The complicated financial regulatory framework is not a success. It protects incumbent firms, exacerbates instability, and inflates costs. Layers of redundant regulation should be removed, and regulatory functions should be consolidated. Financial firms do not need to be regulated by a dozen federal agencies. These changes would improve the competitive environment. They would allow both financial and non-financial firms to provide more services to consumers and expand opportunities for people to (directly and indirectly) improve their living standards. And if members of Congress and the Trump administration want to support 'hardworking, entrepreneurial Americans who grow our economy,' they'll dramatically shrink the existing regulatory system and go even further. Recognizing that freedom and free enterprise are not the enemy, they'll apply the same principles to the rest of their economic policies. They'll avoid policies—including tariffs, trade barriers, price controls on pharmaceuticals, and complicated tax rules—that give bureaucrats more power over people's lives. The type and level of government involvement in Americans' lives currently goes well beyond setting up the rules of the game. In many cases, the government usurps the market and replaces the judgment of private citizens with that of unelected bureaucrats. Our elected officials have increasingly created the type of paternalistic system that autocratic rulers use to gain power over people, and that trend needs to be reversed. Such a system has no place in a republic built on the principles of limited government and free enterprise, and the sooner Congress and the administration get rid of it, the better off Americans will be.
