Standard Bank views sales in execution as an absolute last resort and that it should be held to account if it is found to have acted improperly, chief executive Sim Tshabalala told Moneyweb.
His comments come after Moneyweb reported that a R60 million civil claim had been filed against the nation’s largest banks. Some 200 applicants in the claim have accused banks of acting unconstitutionally in attaching and selling the homes of defaulting debtors at below market value through sales in execution.
A sale in execution refers to the process by which properties attached by creditors are sold at a public auction as a means to recover home loan payments that are in arrears. The public auctions are held by Sheriffs of the Court and can only take place after creditors obtain court orders to attach and sell properties.
Speaking to Moneyweb after delivering Standard Bank’s interim financial results late last week, he said sales in execution were an absolute last resort.
“I would hope that we – as a general rule – would not be wanting to evict people from their properties because it is expensive, it impairs their dignity when that happens [and] when you have to go through a sale in execution there’s always a loss that happens, both for the customer and for the client.
“It is the absolute last resort because what you want as a bank is a lifelong relationship with a client – it’s not a smart thing to destroy that relationship by evicting people. I would hope that where we had to do sales in execution, the monies recovered have been appropriately recovered and allocated to the settlement of peoples’ debts. And that we’ve done that with professionalism, empathy and dignity, and where it is shown that we have not done so then we must be held to account.”
Prior to the case being filed at the Constitutional Court last Wednesday, a Standard Bank representative told Moneyweb it was aware of an intention to launch court proceedings against various banks. At the time of the interview, Standard Bank had not been served with the papers and so had yet to study specific claims leveled against it.
At the time, however, Tshabalala had read media reports on the case. He expressed the bank’s confidence in the courts. “We must make sure the principles of natural justice are followed and our court system in South Africa is great. We know we will be heard [and] the courts will get to the bottom of this.”
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