Standard Bank has announced a second wave of relief to help its customer base navigate financial commitments as Covid-19 continues to impact the livelihood of many individuals across the country.

The payment reprieve is aimed at easing the financial burden of customers earning R7,500 or less, who will receive three-month instalment relief if they are not in arrears on any of their accounts (as at 31 March 2020), the lender said.

“This relief applies to qualifying customers and their associated accounts, which include home loan, vehicle and asset finance, credit cards as well as short term loans. Customers who opt for the relief will see their interest and bank charges capitalised over the term of their loan agreements.”

This second round of relief comes after Standard Bank’s announcement last week that it would be instituting instalment relief for both SMEs and fulltime students who have taken out loans at the bank.

The bank’s small enterprise clients with a turnover of less than R20 million were granted a three-month instalment relief on their business loan repayments. The latest instalment relief measure will further assist business owners who bank with Standard Bank in their personal and business capacity.

The three-month instalment relief will be available on 1 April 2020 until end June 2020. Customers need not contact the bank to initiate the offer, however, customers can continue to pay their accounts as usual should they not want to take up on the relief offer made by Standard Bank.

Standard Bank said it is collaborating with other government initiatives that have been started to support small businesses and their employees. Qualifying employers and employees will also get relief from initiatives like the Solidarity Fund.

Furthermore, the banking sector has collectively decided to waive Saswitch fees during the lockdown. This means that a customer can use any ATM, including those offered by competing banks and only pay the usual fees charged.

Bank rules eased

Bloomberg reported that South Africa’s banking regulator plans to give banks a break from accounting and capital rules that could release around R300 billion rand for lending to help the economy cope with the fallout of the coronavirus.

“It’s quite big, it’s quite meaningful,” said Kuben Naidoo, deputy governor of the South African Reserve Bank and chief executive officer of the Prudential Authority, in an interview. “We will need to evaluate in one or two months whether this is enough.”

The regulator joins other banking authorities around the world that have relaxed rules to keep credit flowing to counter the economic havoc caused by the pandemic.

South Africa’s proposals include dropping minimum capital requirements and compulsory reserve funds for lenders, reducing the liquidity coverage ratio to 80% from 100% and relaxing accounting standards when determining potential losses, Bloomberg said.

While South African banks have been criticized by labor unions and small business owners for not doing enough to help struggling customers as the nation entered a 21-day lockdown on Friday, they have to comply with requirements set by the regulator.

They were also prevented from hammering out a coordinated response until antitrust authorities allowed the lenders to discuss the issue with each other, Bloomberg reported.

“It’s to facilitate the banks to provide these short-term holidays,” he said. “We’ve have had informal consultations with banks and they are prepared to extend payment holidays to certain categories of customers.”

The lenders have asked customers to reach out to them so that tailor-made solutions could be crafted for different situations. Arrangements could include suitable payment deferrals, the restructuring of debt or the provision of small and medium enterprise bridging finance.

While the proposals are available for comment, there is no specified time frame so the measures will be enacted next week, Naidoo said.

The measures, published on the central bank website, will likely target households and small- and medium-sized businesses. The measures are not intended to allow banks to distribute earnings in the form of dividends and the regulator reserves the right to prohibit any payouts, Naidoo said.