SARB Comments on Media Reports About Alleged Capitec Probe
SARB Comments on Media Reports Into Alleged Capitec Probe
(Bloomberg) -- The following is the text of a statement issued by the South African Reserve Bank. The comments come after Bloomberg’s publication of a story saying that the central bank had asked the country’s credit regulator to probe whether it had re-introduced a product criticized for its fee structure. The text of the bank’s statement follows:
The South African Reserve Bank (SARB) notes media reports on an alleged probe into loan-origination fees charged by Capitec Bank.
In its update to Parliament on 30 May 2018, the South African Reserve Bank (SARB) reported that there are three main allegations in the Viceroy report. The first two allegations deal with scheduled loans and the provisioning models, both of which are prudential matters, while the third issue deals with the continued use of multi-loan products. This third issue is a market conduct issue and falls within the responsibilities of the National Credit Regulator (NCR). The SARB met with the NCR and requested that the regulator take the matter forward.
Based on the data available to the SARB, Capitec has adequate capital and adequate liquidity. The bank’s capital adequacy ratio of 34 percent and its liquidity coverage ratio was well over 1,000 percent compared with the required 100 percent. In addition, the SARB did not find any indication that rescheduled loans at Capitec were used to hide non-payment and boost new lending. The bank meets all prudential requirements.
Regulators of financial institutions have the responsibility to investigate various aspects of the activities of these institutions to ensure proper risk management and sound practices are in place.
To contact Bloomberg News staff for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, ;Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, John Bowker
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