National Consumer Tribunal Annual Report 2011/12 National Consumer Tribunal 2011-12 | Page 41

The Tribunal had to determine whether the interest rate charged by
Capitec Bank exceeds the maximum prescribed interest rate of 35,4% per
month in terms of National Credit Regulation 42 (Table A). The Tribunal
refused the application for the consent order and referred the matter to
the Regulator to investigate whether there was prohibited conduct on the
part of Capitec Bank.
The Tribunal found that the contract (which is the subject of the consent
order) between the applicant and Capitec Bank constitutes an unsecured
credit transaction. The legislature has expressed the maximum interest
rate which may be charged as a formula rather than as a fixed rate.
This means that when the Reserve Bank Repurchase Rate (repo rate)
is reduced, credit grantors are obliged to reduce the interest they are
charging, if such rates are higher than the maximum amount allowed in
terms of the regulation. The Tribunal calculated the maximum prescribed
interest rate using the formula in the regulations and found that the
maximum prescribed interest rate that Capitec Bank could charge at the
date of the application was 35,4%. The Tribunal accordingly found that
the interest rate of 37% set out in the consent order is in excess of this
prescribed maximum interest rate.
In conclusion the Tribunal refused to grant the consent order and referred
the matter to the Regulator for a determination of prohibited conduct on
the part of Capitec Bank.
5. In the matter between Thembinkosi Christopher Mpungane
and Addcon (Pty) Ltd, Capitec Bank Ltd, Edgars (Pty) Ltd, and
Value Furnishers (NCT/289/2009/138(1)(P))
This was also an application for an agreement to confirm a debt re-
arrangement agreement in terms of section 86(8)(a), read with section
138(1) of the NCA. The applicant was the consumer who applied for debt
review in terms of the NCA and the debt counsellor found the applicant
to be experiencing difficulty satisfying all obligations under her credit
agreements in a timely manner.
The debt counsellor recommended a restructuring of the payment
instalments to all credit providers. All the credit providers consented to
the recommendation.
The Tribunal expressed concern over the interest rate charged by one
of the credit providers in the consent order. The transaction between
the applicant and Capitec Bank was an unsecured credit transaction.
Capitec Bank was entitled to charge 34,30% per annum in terms of
National Credit Regulation 42 (Table A). Capitec Bank was charging an
interest rate of 37% per annum. It appears that this concern was raised
by the Tribunal, mero muto ie without it being raised by any of the parties.
The Tribunal had to determine whether the interest rate charged by
Capitec Bank exceeds the maximum prescribed interest rate of 35,4%
per month in terms of National Credit Regulation 42 (Table A). The
Tribunal applied National Credit Regulation 42 (Table A).
Annual Report 2011
national consumer tribunal | page 39