After the Bell: Responding to a ghost about SA banks closing accounts

Not one, but two, former editors of South African newspapers have advised me not to do this, but I’m sorry, what’s the fun in life if you don’t occasionally bypass the well-intentioned advice of people who know more than you do? The issue is whether journalists should respond to a response by a member of the public. The general rule is that you should not. You have had your say; readers should be allowed to have their say without editors abusing their access to the editorial pages of the publication to have the last word. Or, as it often happens, the second-last word.

My response (since I’m allowed one but not two) is that it depends a bit, surely. Do you have something new to say? Are there aspects to the response that deserve or even require a counter-response? My answer was that I didn’t really have anything new to say, I just wanted to say it louder. Because that always helps.

Well, I was very happy to let things lie in accordance with my advisers’ sage advice until something happened to change my mind. Let me get to that, but allow me to quickly abbreviate the debate. Last month, the Financial Sector Conduct Authority (FSCA) commissioner, Unathi Kamlana, during a keynote speech at a conference, raised the issue of banks closing the accounts of their customers. 

Kamlana didn’t just say banks should be fair to customers, which would be entirely unobjectionable. He outlined what he expected the process to look like. It should be “just and equitable”, he said. Specifically, the mechanism for appeal and redress should be straightforward and accessible, enabling affected parties to challenge decisions they believe are unfounded or have been applied unfairly.

I disagreed with this approach. It’s more complicated than this, but allow me to pose a simpler analogy. If you own a restaurant, it’s up to you who you serve. If someone comes through the door and you think there is a risk your customers might be abused, you have the right to decide against serving the entrant, and you do so precisely because you are concerned about your customers.

But this is not the issue in dispute: the FSCA does not dispute that banks have the right to close accounts. The issue in dispute is what the banks do before effecting that decision. Kamlana’s view is that you set up a court, you have procedures, you set up an appeal, and you allow your decision to be challenged, it all has to be transparent, and so on. You do this, he says (I’m simplifying here) because having a bank account is a crucial part of participating in society.

Judicial process

I think this is wrong. Yes, banks have to be careful closing accounts (they are — very), but to have an internal court process when a customer with a baseball bat wants to enter your restaurant is bonkers. Let the restaurant throw the customer out and then, if the customer feels hard done by, he or she can go to court and claim the restaurant was overreacting, being unfair, being racist, etc. That is what the court system is for. It’s not for banks to replicate the judicial process.

So in response, National Treasury Technical Adviser Ismail Momoniat said he was at the same conference and made the same point that banks should take care before they close accounts. He said I was confused and had interpreted the speech incorrectly because I made assumptions about matters that Kamlana did not refer to in his speech.

Briefly, his arguments were that:

1. I assumed Kamlana was coming out in defence of billionaires, whom he didn’t even mention;


2. I was conflating the role of the market-conduct regulator, whose job it is to protect bank customers, with those responsible for investigating financial crimes;


3. SA’s high degree of inequality and the requirements of financial inclusion are a pressing and real issue that I wasn’t taking into account; and


4. Other countries were also taking this issue very seriously, like the UK where a bank got into trouble for booting Brexiteer Nigel Farage. (He didn’t mention Farage by name, but the indication was clear.)

To these points, I have the following responses;

1. I know that the head of the FSCA is not going to come out specifically mentioning a particular case, but there is only one person in SA at the moment publicly complaining about his bank accounts being closed, so it’s not a huge leap;


2. Obviously, the market-conduct regulator is not the designated criminal investigating authority, but that doesn’t mean it has no responsibility to try and protect customers against banks deciding they should bank crooks;


3. This is a red herring: SA’s main banks have 57 million customers (some outside SA) and SA has a population of 59 million people. The fact is that SA’s regulators talk about inclusion because they know it plays well with the political masters, but for all its other problems, SA’s banks have been super diligent in opening accounts and regulators should know that; and


4. The Farage case is different: he claimed he was being ousted because of his political beliefs; the bank said he did not comply with the wealth requirement for that particular bank. He wasn’t being denied an account, he was being denied a special account. The UK banking regulator examined the case and found he did not meet the wealth requirement.

But you know, I respect both Momoniat and Kamlana's perspectives; we disagree, but this is all in good faith. These responses to a response are in my mind, more like a conversation.

A notional person

So I was happy to let sleeping dogs lie. But then, absolutely inevitably, an attack commentator of the one person who is in fact complaining about his accounts being closed, Iqbal Survé, responded vituperatively to my response. I know that he is responding to my response because he is trying to stir up the issue even more, but be that as it may.

The notional person involved is a notional columnist for Independent Media, Edmond Phiri. I say notional because after Phiri claimed that the well-known reporter Karyn Maughan was “strikingly similar” to Nazi propagandist Leni Riefenstahl (a vomitous defamation which — in this day and age — could endanger Maughan’s life), Maughan’s publisher, News24, hired researchers to try to find out if Phiri exists and they found he probably doesn’t.

Anyway, Kamlana’s speech was lauded by Phiri, because, hero that he is, Kamlana “addressed critical issues of economic inclusion and the social impact of arbitrary bank account closures — matters that have long been blue-ticked by the mainstream”. Obviously, I am sexist, racist, classist, mainstream and all the other stuff. One gets used to these claims when you write about Survé.

What he is trying to do is clear: by cloaking himself in the garb of poor downtrodden South Africans (completely falsely as it happens: this is somebody to whom the Public Investment Commissioner has lent more than R5-billion), Survé hopes to constrain banks from closing his accounts by pretending that he is at one with the poor, downtrodden people of SA. He is not. He is a billionaire.

But the point is this: when regulators make assertions that suit SA’s growing clan of dodgy billionaires, they shouldn’t be surprised when they get adopted by those dodgy billionaires as their notional advocates. Momoniat says Kamlana never mentioned Survé. Well, maybe he should have. Maybe he should have said, “I’m not talking about billionaires here; I’m talking about ordinary people.”

But he didn’t, and now he has been endorsed in the public eye as Survé’s poodle. This is not ideal. DM