Banks warn new debt-relief law will harm economy

SA’s new debt-relief law will ratchet up the cost of credit, strangling consumer spending with a devastating effect on an ailing economy, a banking lobby group said.

The comments by the Banking Association SA (Basa) on Friday came a day after President Cyril Ramaphosa signed into law a bill that gives the National Credit Regulator (NCR) powers to write off unsecured loans — which do not need collateral — worth R50,000 for consumers found to be critically indebted and earning no more than R7,500 a month.