Bankers’ rights have been curtailed by a ruling in the Supreme Court with a case that Standard Bank has lost, and in the future new rules on bankers are applicable.
The practice where banks can just grab their share of money owed in a mortgage or loan as soon as a deposit is made, can no longer be done without the consent of their client.
The court found that a client is entitled to purchase food and other essential payments before the bank seized the money, for example, settle a mortgage account payment.
How the system will work in practice is still unclear, but financial experts say it will force banks to put much more stringent measures in place before granting a mortgage or loan.
The rule does not apply to banks being prevented from recovering their monthly administration costs from the client’s account.
-Read the original article in Afrikaans on Vryburger
This report does not necessarily reflect the opinion of SA news.