Banks Worried Over New S. African Law Giving Clients Debt Relief

South African banks are concerned that some of their customers will get away with not having to repay their debt.

President Cyril Ramaphosa earlier this week signed the National Credit Amendment Bill into law, setting the groundwork for over-indebted consumers to have payments suspended, in part or full, for as many as 24 months, or even scrapped if their financial situation has been found to have worsened.

The bill was opposed by the banking industry, clothing retailers who provide credit and the opposition Democratic Alliance as it would drive up the cost of loans for low-income earners, restrict lending and ...