Von Tonner
10-12-08, 04:38 AM
The World Economic Forum this week rated South Africa’s banks the 15th most secure out of 134 countries rated, beating even Switzerland (16th), Germany (39th), the US (40th) and Britain (44th).
Our Finance Minister said “That is a very important accolade,” adding that strict bank regulation was among measures that had built confidence in South Africa’s financial system.
There was a time back that SA Banks were offering credit cards willy nilly. I personally was getting calls from banks I did not even bank at offering me credit cards with immediate credit available running into $20,000 upwards. Then the Minister introduced the National Credit Act which, among other things, forced all banks and financial institutions to offer credit under strict control measures. Now, with these measures in place if you want a loan from your bank it does not matter what securities you put up it all depends on your balance sheet and whether you can afford to service the debt. So, for example, you have $1million of your own cash invested in a bank and you want a loan of $20,000 before you could do that transaction over the phone no problem. Today, you would need to make an appointment, have current income and expense sheets which would substantiate your claim that you could servie capital and interest payments - plus of course a good financial track record.
When this law was introduced the first sector to feel the effect was our housing market as it weeded out the risky buyers. Now, having gone through the pain the country as a whole is in a far better shape to weather the current world financial turmoil. This is one of few examples where the electorate can thank an elected official for doing his job properly and been awake on his watch.
Our Finance Minister said “That is a very important accolade,” adding that strict bank regulation was among measures that had built confidence in South Africa’s financial system.
There was a time back that SA Banks were offering credit cards willy nilly. I personally was getting calls from banks I did not even bank at offering me credit cards with immediate credit available running into $20,000 upwards. Then the Minister introduced the National Credit Act which, among other things, forced all banks and financial institutions to offer credit under strict control measures. Now, with these measures in place if you want a loan from your bank it does not matter what securities you put up it all depends on your balance sheet and whether you can afford to service the debt. So, for example, you have $1million of your own cash invested in a bank and you want a loan of $20,000 before you could do that transaction over the phone no problem. Today, you would need to make an appointment, have current income and expense sheets which would substantiate your claim that you could servie capital and interest payments - plus of course a good financial track record.
When this law was introduced the first sector to feel the effect was our housing market as it weeded out the risky buyers. Now, having gone through the pain the country as a whole is in a far better shape to weather the current world financial turmoil. This is one of few examples where the electorate can thank an elected official for doing his job properly and been awake on his watch.