If you earn R7,500 or less and you bank with Standard Bank, you automatically qualify for a three-month reprieve from repayments, while Absa says you can ask for this relief on your car finance, home loan, credit card and short-term loans.

Standard Bank’s announcement is the second announcement from the bank regarding relief for its customers suffering as result of the impact of the coronavirus and the subsequent countrywide lockdown.

A week ago, the bank revealed a similar three-month repayment relief plan for small businesses and full-time students. Funeka Montjane, CEO of personal and business banking at Standard Bank, says the three-month instalment relief for individuals on car finance, home loan, credit card and short-term loans will be available from April 1 2020 until the end of June this year.

That offer was for a stay on debt repayments for full-time students with student loans at the bank and small businesses with a maximum annual turnover of R20-million who have loans with the bank.

Absa made its announcement shortly after Standard Bank for a similar three-month repayment relief but instead of making its relief automatic Absa called on those in need of the relief to apply for it and put no income restriction on its relief.  The bank said financially distressed consumers in need of short-term relief will qualify for a repayment holiday on all Absa’s credit products.

Interest will continue to accrue on your debt  

Earlier this week, Mike Sikani, spokesperson for the South African Commercial Catering and Allied Workers Unions in a statement on the Congress of South African Trade Unions (Cosatu) website called for debt relief plans to be accompanied by zero interest charges during the relief period.

However, it appears that neither Absa nor Standard Bank will suspend interest –instead interest and bank charges will be capitalised over the term of your loan agreement. This may mean that you may face an increased repayment when the three-month relief period expires, but Standard Bank has yet to clarify.

Absa has indicated that it will waive the initiation administration fee for the three-month period but interest charges will continue to accrue.

Delaying the repayment of your loan, will, however, ultimately mean you pay more in interest, so you should only use this measure if you are financially challenged because your income has been reduce or dried up as a result of the coronavirus and the countrywide lockdown.  

Daniel Mminele, group CEO of Absa says he urges those customers who are able to continue making their payments, to do so. “This will enable us to extend these measures to many more who are not in a similar position,” he says.

“Absa campuses have SMEs such as hairdressers, pharmacies, florists and coffee shops, among others as commercial tenants. In recognition of their role in job creation and sustaining livelihoods, these businesses have been granted a rental holiday for the next three months,” Mminele says.

How to access the bank debt relief programmes

“Qualifying Standard Bank customers do not have to contact the bank to initiate the offer, which will be automatically applied. However, if you are able to and would rather pay your accounts as usual, you are encouraged to do so,” Montjane says.

Absa customers have the choice of either maintaining their repayments if they are able to, reducing their repayments or deferring repayments for three months. Credit agreements will be adjusted, by revising the loan period and adding the interest during the relief period to the loan.

Both banks are only offering the debt relief programmes to customers who are up-to-date with their loans. Montjane says if you are in financial distress and are not included in the three-month instalment relief offer, you should contact the bank as soon as possible by email on debtcarecentre@standardbank.co.za or call the bank directly to make an individual repayment arrangement.

In addition to the above measures, the banking sector has taken a collective decision to waive all Saswitch fees during the lockdown period, with immediate effect.

This means you can withdraw money from any ATM, regardless of which bank you use, and you will not pay punitive charges for using a competitor bank’s ATM.