Banks that expose themselves in a risky manner to unsecured credit extension do not only put themselves in danger but also hold a threat to the whole country with this type of irresponsible action, Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on trade and industry says.
A good example of this is African Bank which had to be rescued over the weekend by the intervention of Ms. Gill Marcus, the governor of the Reserve Bank. Marcus announced support measures which will offer African Bank a way out of its distressed situation.
According to Adv. Alberts it has been clear for a long time already that African Bank found itself in trouble. When banks had to report to the parliamentary portfolio committee on trade and industry previously about their financial states, it was clear that the bank was hugely exposed to the extension of unsecured credit extensions.
“The FF Plus will request the committee to have measures instituted to ensure that better oversight is put in place with regards to the extension of credit.
“We will be requesting that banks explain about credit being extended too easily. It does not only create a vortex for the public who fall into the debt-trap, but also hold negative consequences for the country’s economy as it is taxpayer’s money which now has to rescue the situation,” Adv. Alberts says.
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