South Africa Retail Banking Diagnostic Under the Spotlight

National Treasury

National treasury has published comments submitted on the South Africa Retail Banking Diagnostic.

Comment on the Diagnostic Study drafted by the World Bank was called for in September 2018.

The study is designed to ensure fairer bank practices in South Africa.

Treasury commissioned the study to “provide independent research on identifying the extent to which banks treat their retail customers fairly in relation to transactional and fixed deposit accounts.”

Some recommendations to address identified issues include introducing new obligations on financial institutions to ensure that changes to account and deposit products focus on product suitability for customers, considering new measures to promote the provision of transactional accounts that respond to the needs of low-income customers and implementing an improved disclosure programme for account and deposit product customers.

Some of the responses by treasury and the Financial Sector Conduct Authority (FSCA) include that the FSCA will undertake further research into customer needs in relation to transactional accounts; a workstream considering unfair product terms and conditions, fees and penalties to be set up; a workstream on improving disclosure requirements in relation to bank products to be set up; a banking conduct standard is under construction; the FSCA to engage the NCR on all credit-related aspects raised in the diagnostic and a workstream on account switching and closures in particular to be set up.

Sabinet Cape Town Office