- Nedbank has told its customers in an official email that they will have to honour their home loans even if their land or property is expropriated
- The email caused a mini-furore on social media has been confirmed as being legitimate by the bank
- Nedbank said home loans were contractual agreements and would remain payable until the debt had been repaid in full
Nedbank has told its customers in an official email that they will have to honour their home loans even if their land and or properties are subjected to expropriation without compensation. Á email from Nedbank has caused a mini-furore on social media platforms and has since been confirmed as being legitimate by the bank.
The bank’s media relations boss, Kedibonea Molopyane, confirmed the validity of the email despite some social media users pointing out that the email seemed to contain erroneous information such as incorrect phone numbers.
Nedbank home loan clients were left up in arms by the document which effectively makes it clear that the bank would not deem expropriation without compensation as a valid reason for clients to default on their payments.
Briefly.co.za gathered that Molopyane said she would give additional details and clarify the content and exact meaning of the document in the coming days.
Citizen.co.za reported that the email stated the following:
“It is important to note the Home Loan agreement is subject to a contractual agreement, and bond payments remain due and payable until such time that the bond is paid in full irrespective of any form of land expropriation – with or without compensation. We would encourage you to continue with the bond payments until such time a determination is made.”
The document proves once again exactly the monumental task faced by President Cyril Ramaphosa and his administration in its quest to enact sweeping land reforms without causing damage to other sectors of the economy.
Ramaphosa has expressed the need for South Africa to enact land reform in order to right the wrongs of the past and to help redress the skewed property ownership patterns in the country.
The president needs to balance that need against the need to grow the South African economy which has gone from struggling to stalling to possibly entering a technical recession.
The financial sector has in the past expressed its concerns about exactly what land expropriation without compensation would mean for banks and other financial institutions which are exposed to billions of rands worth of home and property loans.
Nedbank has already indicated that it was against amending the Constitution and the bank said it was taking part in the parliamentary processes and had submitted its own proposals on land reform.
Nedbank, FNB and Standard Bank recently said that while the ongoing land debate had not yet directly affected its business, it has caused potential investors to reassess their options.
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