Independent Online

Monday, December 4, 2023

View 0 recent articles pushed to you.Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Standard Bank’s hypocrisy amid bank account closures

Published Aug 7, 2023


By Feroza Petersen

The recent firestorm ignited by Standard Bank’s decision to close Independent Media’s bank accounts unveils a deeper layer of hypocrisy not only in South African Banks, but as recently noted, globally.

As accusations of biased actions and racial discrimination come to the forefront, Standard Bank’s own murky reputation and dubious practices cast a shadow over its claims of preserving reputational risk.

Amid the uproar, the glaring question arises: Can Standard Bank genuinely claim to protect reputational risk when its own track record is peppered with transgressions? The bank’s imminent closure of Independent Media’s accounts, ostensibly due to reputational risk concerns, seems incongruent with its own past.

Standard Bank, along with three other major banks, was found guilty in a court of law for engaging in the Rand’s price-fixing activities. This convoluted affair tarnished the very integrity Standard Bank claims to uphold. The realisation that banks themselves have manipulated markets begs the question: can they be trusted to impartially assess reputational risk?

Furthermore, the revelation that multiple banks, including Standard Bank, were implicated in turning a blind eye to money laundering activities within the ‘Gold Mafia’ case shatters any illusion of moral high ground. The banking industry’s pledge to curtail financial crimes is rendered hollow when their own actions contradict these promises.

Standard Bank’s actions in the Independent Media case invite scrutiny not only into its own conduct but also into the broader ethical landscape of the financial industry in South Africa. The notion of reputational risk is rendered hollow when institutions perpetuate inequality, engage in market manipulation, and overlook money laundering under their watch.

Banks cannot be allowed to hide behind the vague concept of “reputational risk” without clear and consistent criteria. Such ambiguity threatens the very fabric of trust in banking and our democratic society.

If banks were genuinely concerned about reputational risks, logic dictates that a significant portion of government and public sector institutions should be deemed ineligible for traditional banking services. The daily headlines are rife with allegations of bribery, corruption, and mismanagement of public funds within these entities.

In a world where accountability and transparency are prerequisites for trust, Standard Bank’s move against Independent Media appears to be at odds with these principles. As the saga unfolds, the call for a comprehensive overhaul of the financial sector gains momentum.

The reckoning is not only about the closure of bank accounts but about the very essence of trust that underpins the industry.

* The views expressed do not necessarily reflect the views of IOL or Independent Media.