IT’S UNFAIR FOR BANKS TO CLOSE ACCOUNTS WITHOUT HEARING OUT THE CLIENT, SAYS ZONDO

CHIEF Justice Raymond Zondo said it was unfair that banks can simply give a client reasonable notice of termination before shutting down accounts. This was a recommendation in the final part of the report of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector. His recommendation follows the landmark ruling made by the Equality Court that granted Sekunjalo Group an urgent interdict, with costs, barring Nedbank from closing any of the companies' accounts, protection to clients could soon be offered in the form of new laws. The commission recommended that existing laws need to be amended, or new laws should be enforced, allowing clients an opportunity to defend themselves, before a bank in South Africa can shut down a person's account. The current law, coming after the Supreme Court of Appeal (SCA) ruled that banks were not obliged to hear the client's side, since the two shared a contractual relationship. “In this day and age in South Africa, it is unacceptable that an institution as powerful as a bank should have no obligation to hear … what a client has to say before the bank may close that clients' account on suspicion that the client may be involved in illegal or corrupt transactions,” Zondo said. “In our legal system, even those who are accused of rape and murder are not sent to jail without being given an opportunity to tell their side of the story. There is no reason why banks should not be required to observe this basic principle,”

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