Regulator to Audit African Bank for Reckless Lending - Quick Consolidation Loans

Regulator to Audit African Bank for Reckless Lending

Regulator to Audit African Bank for Reckless Lending

The company secretary of the National Credit Regulator (NCR), Lesiba Mashapa said yesterday that the NCR will be auditing the bad loan book of African Bank for reckless lending.

The regulator was criticised in the media for refusing to respond about reckless lending at African Bank, when questioned by the Myburgh Commission for their report on the collapse of the bank.

The Myburgh Commission sought to determine whether African Bank’s business practices were negligent, reckless or fraudulent.

“The commission did not have the capacity or the time to investigate possible reckless lending by the 513 branches of African Bank” states the report.

Debt Relief for African Bank Borrowers

There have been many calls for African Bank to be audited for reckless lending, ever since it was put under curatorship.

During a debate regarding the possible introduction of a debt amnesty, Geordin Hill-Lewis, a member of Parliament’s Portfolio Committee on Trade and Industry, proposed that African Bank borrowers required debt relief the most.

Consequently, Hill-Lewis asked the Reserve Bank (Sarb) to hand the bad loan book over to the NCR to investigate for reckless lending. At the same time, he implored the regulator to conduct the required investigation.

The Sarb promptly responded, stating it was the regulator’s decision whether or not to investigate the bad loan book.

Preparing for Audit

“[The NCR] has always wanted to conduct an audit into African Bank on reckless lending” said Mashapa this week. As the bank was placed under curatorship, the Banks Act limited any further action by the NCR, he explained.

Mashapa asserted that the NCR had always disclosed all information relating to its investigation of African Bank with the Sarb. He argued that it was up to Sarb to provide the Myburgh Commission with that information. Moreover, the Commission’s terms of reference limited the questions it could ask the NCR.

Last month, the NCR proposed measures to help over-indebted and retrenched consumers, along with an audit of African Bank’s bad loan book, to the Portfolio Committee on Trade and Industry, said Mashapa.

The NCR is currently preparing to perform this audit and intends to get it done as soon as possible, he confirmed.