FNB has been found guilty of reckless lending and has had to write off a loan of more than R150 000 to a Gauteng woman who claimed the bank had failed to properly assess her finances when granting the loan.

A Sunday Times report notes last month the National Consumer Tribunal (NCT), in a ruling on the complaint submitted by Annet Ludick, said the bank had been unreasonable in awarding her such large overdrafts on her credit cards that she would have struggled to repay them.

The judgment explained how Ludick had approached the bank on several occasions in 2015 and been granted credit, but the following year she became unable to repay the debt, and with the assistance of a debt-counselling service lodged a complaint against FNB with the National Credit Regulator.

The regulator investigated her complaint, but ultimately concluded that no reckless lending had taken place.

She then approached the NCT, which recognised Ludick's arguments that the bank had not conducted affordability assessments or credit checks when approving her loans and overdrafts, and that her spending each month far exceeded her income.

In its ruling the NCT said FNB ‘can reasonably have been expected to have had good systems in place to ensure it can produce evidence of the assessment done. It may have conducted assessments but in the particular circumstances of this matter it was unable to provide adequate proof thereof.’

The tribunal said the bank should have settled the matter when the complaint was reported in September 2016, notes the Sunday Times report.

FNB's Lwazi Stuurman would not confirm if the bank planned to appeal against the ruling, adding: ‘FNB conducts affordability and credit assessments in alignment with its credit policies and the law. The bank complied with the affordability requirements of the NCA (National Credit Act) in respect of this matter, however it could not satisfy the record-keeping requirements due to operational inefficiency.’

The report adds the ruling comes in the wake of the recently signed National Credit Amendment Bill, which aims to assist over-indebted South Africans to have their debt suspended, in part or in full, for up to two years.

If the person's financial circumstances do not improve, they can apply to have the debt extinguished.

Full Sunday Times report (subscription needed)