During the drafting of the Usury Amendment Bill in the early 1990s, the banks informed the government that they planned to enter the black low-cost housing market. They committed to contributing R3.5 billion to the Urban Foundation. However, the banks argued that low-cost housing carried higher risk and yielded lower profits compared to the white housing market. As a result, they wanted to charge higher interest rates on loans to black households.

The government rejected this proposal outright. Allowing higher interest rates based on race would amount to discrimination and could trigger mass non-payment from black consumers. To offset the banks’ claimed financial risk, the government instead proposed a Monthly Administration Fee of R5 (VAT excluded) on all mortgage bonds.

A formal Schedule was added to the Usury Act 73 of 1968, authorising banks to charge a maximum admin fee of R5 per month. When the National Credit Act (NCA) took effect on 1 June 2007, this fee was renamed Monthly Service Fees, and the cap increased to R57.

The Decline of Standard Bank’s Mortgage Division

Before 2007, Standard Bank was widely seen as one of South Africa’s most reliable and stable financial institutions. But by 2009, the bank had become increasingly controversial under the leadership of CEO Sim Tshabalala.

A Media24/Business article published on 19 March 2017, titled “Winning Women: Banking on Home Loans”, reported that Standard Bank had suffered losses of roughly R1 billion on its mortgage loan book in 2008. In response, Funeka Montjane was appointed as Financial Director to Mr. Tshabalala. According to the article, she introduced what were described as “unconventional methods” to stop further losses.

These alleged “unconventional methods”—implemented from 1 June 2009, without client consent—reportedly included:

• Extending loan terms from 20 to 30 years

• Increasing agreed interest rates

• Periodically increasing monthly service/administration fees

• Debiting client accounts without authorisation

Discovery of Unlawful Fee Increases

In February 2010, Emerald van Zyl noticed periodic increases in Standard Bank’s Monthly Admin Fees while analysing client mortgage statements. He referred three cases to the National Credit Regulator (NCR).

The NCR took the matter to the National Consumer Tribunal, which ruled that Standard Bank had no legal right to increase Monthly Administration Fees.

Standard Bank challenged the ruling, and the case—NCR v Standard Bank of South Africa (Case No. 231/12)—went to the Supreme Court of Appeal. The SCA confirmed the Tribunal’s findings, stating:

“The respondent is not entitled to charge an administration fee on housing loans that existed at the time the National Credit Act 34 of 2005 came into operation in excess of the fee provided for in paragraph 3(b)(i) of the Schedule to the Usury Act 73 of 1968 unless and until that fee is amended under the powers conferred by s105(1) of the National Credit Act.”

At the time, Standard Bank was administrating around 250,000 mortgage loans, leaving them potentially liable for R1.5 billion in refunds.

What Emerald van Zyl Found

After investigating approximately 150 Standard Bank mortgage accounts, van Zyl concluded:

1. Less than 50% of affected clients were refunded.

2. Refund amounts were often incorrect—sometimes only 12% of what was owed.

3. After issuing partial refunds, the bank continued to charge inflated admin fees, openly defying the SCA ruling.

It is estimated that the total amount now owed to clients has grown to R2 billion.

A message from the webmaster at the time summed up the public frustration:

“Well done, Simmy. As CEO of Standard Bank, you ripped off clients to secure your annual bonus of R78 million this year.”

Standard Bank’s Media Release and the Real Impact

In 2013, Standard Bank issued a media statement claiming all affected clients had been refunded on 5 January 2013. Yet evidence from clients and independent investigators shows this was not the full truth.

For more details, see the section titled “R2 Million Cover-Up on Monthly Service/Admin Fees.”

The Human Cost

Due to these “unconventional methods,” thousands of Standard Bank mortgage holders lost their homes through sales in execution—not because of the original loan terms, but because the inflated instalments became unaffordable.

Over the past four years, Emerald van Zyl has assisted more than 40 clients in stopping unlawful sales in execution.

Final Message from the Webmaster to Sim Tshabalala

“You are a devious banker who ripped off Standard Bank clients and sold their homes in execution when they couldn’t pay the inflated instalments—all so you could secure your yearly bonus of R79 million. You should hang your head in shame.”