All banks in South Africa are required to adhere to the Code of Banking Practice, which sets out the minimum standards for service and conduct that customers can expect from their banks. The Code aims to promote fairness, transparency, accountability, and reliability in all banking relationships. Its main objectives are to promote good banking practices by setting minimum service standards, increase transparency so customers understand what to reasonably expect from banking products and services, encourage fair and open relationships between banks and customers, and foster confidence in the South African banking system. Furthermore, banks are obligated to comply with court judgments and Acts of Parliament that govern money-lending transactions and protect consumers from exploitation.
Historically, Standard Bank was regarded as one of the most reputable banks in South Africa before 2007. However, during 2009, under the leadership of Chief Executive Officer Mr. Sim Tshabalala, the bank’s reputation began to deteriorate. According to an article published in Media24/Business on 19 March 2017 titled “Winning Women: Banking on Home Loans”, Standard Bank reportedly suffered a loss of R1 billion on its mortgage loan book in 2008. To address the issue and prevent further losses, Ms. Funeka Montjane was appointed as Financial Director to Mr. Tshabalala. The article stated that she introduced “unconventional methods” from 1 June 2009—without the knowledge or consent of clients—to mitigate further financial losses.
These “unconventional methods” allegedly included:
The effects of these actions were severe. For example, one elderly woman who took out a R1 million mortgage in February 2009 over 20 years discovered upon retirement that her loan term had been extended to 30 years without her consent—forcing her to continue paying until age 80 and costing her an additional R1 million. Furthermore, two other clients, both women, were reportedly overcharged R258,311.38 and R192,610.84 respectively due to unauthorized interest rate increases. Unable to keep up with the inflated monthly installments, they faced property sales in execution.
As a result of these practices, many Standard Bank clients reportedly lost their homes between 2009 and subsequent years, unable to afford the increased payments. Emerald van Zyl has assisted numerous affected clients in preventing property sales and exposing these issues publicly.
In conclusion, this situation underscores the importance of strict adherence to the Code of Banking Practice, which exists to protect consumers from unfair treatment, promote ethical banking behavior, and maintain trust within the financial system.