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Bank accounts closure - it could happen to you

Standard Bank has notified Independent Media and IOL that its business bank accounts will be closed by August 21, threatening the livelihoods of 1600 employees. Picture Ian Landsberg / African News Agency (ANA)

Standard Bank has notified Independent Media and IOL that its business bank accounts will be closed by August 21, threatening the livelihoods of 1600 employees. Picture Ian Landsberg / African News Agency (ANA)

Published Aug 3, 2023


It could happen to you…

Nine of South Africa’s banks have cast a vote of no confidence in one Dr Iqbal Survé and have closed all his accounts and those of any and every company vaguely associated with him.

Even some of the directors and senior management of these companies have had their personal accounts terminated.

The reason for this? Well, it appears that it’s simply because they don’t like Dr Iqbal Survé and his particular brand of rhetoric. This is not dissimilar to the UK’s Brexit Campaigner, Nigel Farage who had his personal bank account given the executioner’s chop because he didn’t fit their own political viewpoint and marks a growing number of such incidents across the world.

As it is currently not a crime to hold any form of political opinion and Survé has neither been tried (save in the court of popular opinion) nor found guilty of any crime anywhere in the world, the natural conclusion is that this is a political move on the part of the banks. Whether this is by instruction from parties high up the ruling ladder or a case of autonomous dislike, the fact is that all nine of the banks following suit within short succession of one another is not a coincidence.

The blanket term ‘reputational risk’ has been used by all these institutions to cut off the Sekunjalo empire’s transactional abilities.

It is a not-so-subtle warning to all account holders to watch their Ps and Qs or else follow the same fate.

But, whether you like Survé or not as a person, is it fair, just, and reasonable to close his company accounts and jeopardise the lives and livelihoods of literally thousands of people?

And in the case of Independent Media, the inability to transact through a bank account, could well have even more negative outcomes for the country as it threatens media freedom, the very fabric of our very democracy.

This is a situation that is all too real given the Competition Appeal Court ruling to reverse a previous decision to temporarily relieve the closure of bank accounts, which has now led Standard Bank to issue marching orders to the country’s largest print publishers and second largest digital news organisation, along with 26 other Sekunjalo Group related companies.

Employers today, often check out potential employees by searching their social media accounts and seeing what they post. Now, in much the same way, banks, it would appear, can decide whether one is worthy of holding an account at their institution or not based on whether they like your views or not.

We are on a roller coaster towards dystopia. There's no two ways about it.

The banks’ behaviour in closing bank accounts on a whim, is a highly problematic situation with severe consequences for individuals and society. It speaks to a lack of financial freedom when banks have unchecked authority to close accounts arbitrarily, and when people's access to their own money and financial assets is at the mercy of these institutions.

The abrupt closure of bank accounts on a large scale could result in widespread financial turmoil. People might lose their savings, businesses could collapse, and economic stability would be severely compromised.

Have we placed too much trust in banks to manage what is, after all, our money?

In such a scenario, inequality and exploitation are only a breath away. Such a concentration of power in the hands of banks is likely to exacerbate existing inequalities. Those in positions of power within the banking system could exploit their authority for personal gain, as we have already seen in this country, leaving many vulnerable individuals significantly disadvantaged.

However, it is the banking system that needs to be aware, as there is already a growing distrust in banks and the overall financial system, and closing bank accounts on a whim is not helping. This could potentially lead to a situation where people become less likely to deposit their money, conduct transactions, or invest in financial products, leading to a breakdown in financial institutions.

We’ve already witnessed the advent of cryptocurrencies, which came about because of the sheer power of the existing system, its manipulation, and the fact that most of the world is over-indebted on a massive scale.

Further, there are other clear indicators that the oppressive banking system is in trouble, with alternative economies such as other currency and bartering systems to bypass traditional financial institutions on the rise.

The banks, who are supposed to be regulated in this regard, must adhere to specific guidelines to ensure fair practices and the security of their customers' assets. And that is the acid test here – has the banks’ actions been fair in relation to closing not one, not two but more than 30 accounts relating to companies and individuals associated with just one person?

Is Iqbal Survé’s reputation, and influence so great, and his views so divergent, that he is a threat to the essence of banking?

In democratic societies, the concentration of power in any single institution or sector is typically discouraged. However, the banks with their combined asset base several times greater than the country’s GDP and their apparent ability to circumvent the fairness rule, have, in my humble opinion, signalled a wholesale abuse of power and a systemic failure.

Immediate corrective actions are necessary to restore stability and protect the rights and freedoms of these companies and individuals, because if it can happen to them and on such a large scale that is unprecedented in the history of this country pre- and post-apartheid, then it can happen to anyone of us.

And if I were Survé and co, I would be looking to mount a challenge at the Constitutional Court as we have reached an existential threat to all our freedoms.

* The author of this piece has chosen to remain anonymous for fear of reprisals by the banking industry.

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