![]() The cost of cash has increased enormously. We are here in the spirit of transparency. If they are unfounded we know we are not communicating. There are representatives of banks present and they are very concerned about grievances from the public we like to hear these. Submission by Bob Tucker, Chief Executive of the Banking Council: Mr Tucker: I am glad of the opportunity to attend these hearings. If a loan is, say, R500 the percentage of this cost is much higher than a loan of R5 000. There is wide variance in the price of loans, but there is the emergence of a core. Deruda: People at low income levels cannot pay cash. Question: You say buyers should borrow money and then pay cash rather than enter into hire purchase. If guidelines are exceeded these must be disclosed. ![]() Question: Do guidelines from government apply to banks? Are credit rates for hire purchase regulated? Deruda: Guidelines and not ceilings should apply. ![]() Short action is possible because many lenders are on the government payroll. (2) Action by government should differentiate between bad and good operations. He or she can then go to other lenders with the same pay slip. (1) The system allows the individual to borrow on a pay slip. The banks have therefore opened the market to unscrupulous lenders. Ms Thabethe (ANC): How is the practice of borrowing abused by state employees? Mr Deruda: Banks do not help small borrowers. COSATU expressed much criticism of banking institutions and unscrupulous money lenders and of high interest rates. They also intend to be more helpful to small borrowers and improve their communication with the public. The Banking Council maintains that banking charges are not excessive when compared with other countries and they are working to improve their bad image. TRADE & INDUSTRY PORTFOLIO COMMITTEE 2 MARCH 1999īANK TRANSACTION CHARGES & MICRO-LENDERS: HEARINGS Documents distributed: Banking Council Submission on Bank Transaction Charges and Small Loan Organisations (Appendix 1) COSATU Submission on Bank Charges, Microlending, and the Usury Act (Appendix 2) Chief Directorate on Business Regulation, Department of Trade and Industry (Appendix 3) Law Review Project submission Submission from AG Lubbe on Credit Instalment Transactions Alliance of Micro Enterprise Development Practitioners SUMMARY Submissions were heard from various institutions on bank charges and small loans.
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