African Bank has agreed to pay a fine of R20 million in terms of a settlement reached with the National Credit Regulator (NCR) following a probe of reckless lending.
The National Credit Act provides for the imposition of a fine for reckless lending. It can be up to R1 million or 10 percent of a credit provider’s annual turnover, whichever is greater.
The regulator had called on the National Consumer Tribunal to fine the bank R300 million.
The R20 million will be paid to the National Revenue Fund, which is administered by National Treasury.
The bank has also agreed to “write off the loans, refund consumers, rescind judgments taken against consumers, remove judgment and adverse information listings from the credit records of consumers, and develop an active engagement process with the NCR”, according to a statement released by the regulator yesterday.
The bank also issued a statement, saying the cases against it had been withdrawn.
“African Bank endorses and supports the processes initiated by the NCR and all other regulators, and will continue to participate and play an active role to ensure that the credit industry further develops in a responsible and effective manner.”