Absa and FNB put 2 000 jobs on the line

TWO out of the big four banks, Absa and the First National Bank (FNB) are accused of perpetuating apartheid-era tactics in South Africa’s embattled financial services sector.

Industry experts and political parties have raised concerns, after accounts owned by black people continue to be targeted and shut down with impunity.

Various analysts have alleged that black-owned businesses and scores of ordinary South Africans have found themselves at the receiving end, as banks in the country perpetuate what is described as “weaponised apartheid-era tactics” through financial exclusion of black people in the banking sector.

In an exclusive interview at the weekend, well-known private financial consult and investigator Emerald Van Zyl said the apartheid tactics were currently in full swing and black people, as well as their businesses, are viewed as a “risk”, which is why black people were being discriminated against.

He claimed that black people were either overcharged or shut down, disabling them from participating in the economy of the country.

“It is disappointing that banks are involved in such horrific crimes of apartheid tactics. They are deliberately sabotaging blacks. These are pure patterns of apartheid in motion,” said Van Zyl.

According to Van Zyl, letters have been written to government officials exposing banks for their discrimination against black people.

He added that he has since taken FNB to court for its racist discriminatory treatment of black people.

Director and research head at Firstsource Money, and founding executive board member of London-based Monetary Reform International, Redge Nkosi, said it was unimaginable that banks were closing accounts of individuals or firms, that depend on them for their real economic activities.

“These institutions are supposed to fulfil the ‘financial inclusion’ purposes of society; a very important mission for the government. The only time I expect them to close accounts is when an account holder poses significant risk to both the bank, its shareholders and the public purpose for which they serve, for example, some fraudulent act that places both the bank and the public in some danger,” Nkosi argued.

Nkosi added that the South African banking system is oligopolistic in nature and, thus, tends to act in “concert”.

On Thursday, AYO Technologies communicated to shareholders that the group received notice from FNB, informing it of the closure of its transactional accounts and that it had since launched legal proceedings against the bank.

The move to close the company’s accounts became a heavy subject of criticism, with business organisations and political parties slamming the decision, and accusing the country’s big four banks of being players in the country’s factional politics, rather than protecting jobs. There are more than 2 000 employees of the company, whose jobs are on the line.

Nadiah Maharaj, FNB’s chief risk officer, said the bank has given reasonable notice to terminate its services to AYO Technologies, but would not provide any further details on the matter.

The African Transformation Movement expressed its shock, saying the move was unwarranted.

Spokesperson Sibusiso Mncwabe said the banks had not provided tangible evidence of wrongdoing against AYO and other associated companies.

The National Freedom Party (NFP) also lashed out at the institutions, saying their action called for the establishment of the state-owned bank.

NFP MP Ahmed Munzoor Shaik-Emam said what the two financial institutions did was an example of how the private sector monopolised the country’s economy.

“Our people will always be under the mercy of these few people that control the entire economy, including the financial sector.

“There is absolutely no evidence, they have given no good reason why they are closing the accounts. This calls for government intervention …”