First National Bank (FNB) which is formerly called as Saambou has been cheating the black bondholders for several years time in the low-income housing market by maneuvering interest rates. At present, this financial institution is facing adverse legal measures in the Equality courts in Gauteng and Western Cape.
Emerald van Zyl who is a popular financial investigating consultant has assisted the bondholders in creating complaints against the institution. They have put cases in the Equality courts in the Gauteng and Western Cape. Hearing was postponed to march 1st, 2017 in the Western Cape whereas the documents filed in the court of North Gauteng and South Gauteng seems to be disappeared.
About 23000 complainants have filed case against FND in the Western Cape for discriminating black landholders from denying their benefits in terms of decreased interest rate and neglecting Usury Act. The amendment of the act takes place in the year 1990 for the access to initiation fees as well as monthly administration fees for housing loans. Through this method, there will be prevention of interest rate fluctuations taking place while getting smaller loans for low-cost housing sector.
Van Zyl had examined the internal documentation and decisions created by Saambou that clearly displays the series of instructions denying his customers from the benefits of interest rate cuts. As per court papers, “July 1st, 1996, the basic rate was decreased to about 1%. The complainants were not qualifying for the decrease”. Over the period of three years later, there were instructions found within the bank which clearly excluded the low-cost bond holders from enjoying the benefits of rate cuts. With each rate cut, high-cost housing clients would get letters regarding the rate decrease along with their updated interest rates. On the other hand, the low-cost housing clients will not get any letter regarding the increase or decrease.
Van Zyl has estimated that about R3bn was payable to the pitiable people as a result of the discriminatory action of FNB. It is clearly mentioned in the letter to the Reserve Bank Governor, Gill Marcus that how three of the complainants were discriminated against race. it is also mentioned to take action against the bank for creating such sort of adverse effect on the black bondholders. The investigator also pleads to take immediate action against FNB so that whole South African banking industry must be realized.
Racist Categorizations And Discrimination
One of the complainants named Maria Magdalena Pietersen has brought her house on July 1995 for the cost of R61000. The bank diversified clients as per their race and her loan possess the internal code of PRO 86 that indicates “black low cost housing”. During the time of June 30th, 2003, Pieterson seems to pay 4% higher interest than white bond holders owing to the discriminatory practices of the bank.
By the time of January 31st, 2014, the debt made by her was R173, 02 rather than being R14 176, 05 as per Van Zyl’s calculation. The difference is R108349.07 which indicates the total damages suffered by complainant due to their unfair discrimination.