Credit providers across the country have been tightening their systems in preparation for the much- anticipated National Credit Act, which will take effect tomorrow, but the banks seem to welcome the shift.
"We've spent between R230million and R250million on personnel training, updating of IT systems and price changes," said FNB Personal Banking Peet van der Walt.
"The changes however will only affect those who take up business with us after the first of June," he said.
Nedbank, which will be spending almost R200million on the shift, said though people would be protected from reckless lending and unsolicited marketing, they should be careful to provide the correct information when applying for credit.
"When people give false information and the bank is found to be guilty of reckless lending it puts the entire industry in jeopardy," said Nedbank head of risk monitoring Pragnesh Desai.
The act defines reckless lending as a situation where the lender fails to conduct an affordability assessment. The institution would also be guilty if there is information that shows that the consumer did not understand his rights, obligations, risks or costs, or if there is proof that the customer is over-indebted.
Van der Walt said though the stricter measures would have a marginal affect on the bank's bottom line, there would be a relatively quick market adjustment.
"Since everyone will be affected by the legislation, there won't be any big impact from the act. It will be a positive step because we will have more informed customers," he said.