A proposal of the FF Plus that the parliamentary portfolio committee plays a larger oversight role in the financial affairs of South Africa’s banks, was today accepted, Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on trade and industry said.
According to Adv. Alberts, the proposal entails representatives of banks, micro-lenders and the relevant regulatory institutions should personally report to the committee at least twice a year about the state of their unsecured loans.
They will also have to report on their financial status ad their exposure to credit extensions.
“This oversight, apart from the oversight that the credit regulator has itself, could play an important role in creating an early warning system and to act pro-actively before banks reach a critical position which could harm its clients and the whole financial system.
“If such an arrangement had been put in place, talks could have, for example, in the case of African Bank, been talks held with the Reserve Bank and the banking industry as a whole to manage the situation before an implosion had taken place.
“This idea of the FF Plus was also accepted against the background of the frustration that the committee is experiencing with credit regulating agencies which do not act preventatively, but only do undertake their ratings afterwards,” Adv. Alberts says.
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