On Sunday, 22ndMarch Standard Bank made a move and announced that they will be introducing a payment holiday for three months which will be extended to small businesses that have a turnover of less than R20 million and to full time students with a student loan.
The scheme will start on the 1stApril and will end on the 30thJune 2020. Standard Bank will create new automatic payment terms that will help small business clients, so they can manage their cash flow better and more importantly pay their employees. Lungisa Fuzile, Standard Bank South Africa CEO explained the relief is done through the capitalising of interest and fees, which are usually paid to the bank and the repayment terms will be changed to a later date.
Full time students that have a student loan with Standard Bank will also be given a payment holiday with 0% interest with zero fees. The payment holiday will be applied automatically by the bank to qualifying customers.
Other customers will need to contact the bank to show their circumstances says Fuzile.
Standard Bank will also be offering other forms of assistance including the option to defer payments for a certain period of time and customers will also be able to restructure and consolidate the overall debt.
What Are Our Other Banks Doing?
On Sunday night, Nedbank stated that they will be supporting clients with individual solutions to cash flow challenges that they might be experiencing due to Covid-19, which will also extend to any loan agreements with Nedbank in good standing.
The support could include extending existing loan periods, deferring payments for a suitable amount of time or extending additional credit to manage cash flow shortfalls.
Clients will need to contact Nedbank to change or restructure payment arrangements.
A spokesperson for Absa said that the bank will continue to evaluate the Covid-19 impact, which includes the economic impact on an ongoing basis. They went on to say that it is too soon to speculate about the impact on defaults and that Absa is looking at various possible scenarios and related actions that might come into effect if their customers find themselves in financial difficulty.
First National Bank
FNB has said they have aligned with the view of the Banking Association of South Africa, (Basa) and at this stage do not have any further update.
Basa said in a statement that they are speaking with banking regulators and competition authorities as a matter of urgency so that they can come to a conclusion as to how the banking industry will protect staff, customers and small businesses from the impact that Covid-19 will have socially and economically.
Cas Coovadia, Basa Managing Director said that they are fully aware that the country is facing a crisis, which demands an urgent response, but they need to ensure any action taken is legal, fair, sustainable and effective for the duration of the pandemic and afterwards. Any steps to be taken will be detailed as soon as possible.
Tauriq Keraan, CEO noted that the bank is not yet lending to students or businesses. However, he said that they will be keeping their GoalSave interest rates at existing levels despite the recent interest rate cut. Customers can then still earn up to 10% interest per year if they have money in GoalSave for longer than 90 days and if they give only 10 days’ notice.
Article Source: https://www.moneyweb.co.za/news/companies-and-deals/standard-bank-provides-covid-19-debt-relief-for-smes-students/