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Banking shares extend losses amid bank collusion scandal

The banking index has been trading over 1% lower on Monday afternoon.

Picture: EWN.

JOHANNESBURG - Banking shares have extended their losses thanks to concerns by investors that local banks may face major fines after being implicated in manipulating the rand/dollar exchange rate.

The Competition Commission said last week that it believes 17 foreign and South African banks colluded with some traders making millions and referred the case to the Competition Tribunal.

The banking index has been trading over 1% lower on Monday afternoon.

Traders say there are concerns that some local banks including Absa, Standard and Investec may be forced to pay stiff penalties.

The Competition Commission has recommended fines amounting to 10% of annual revenue for these banks.

In the US, a number of traders have already appeared in court in New York.

Currency traders say this has resulted in some investors selling off their shares as a precaution.

A few local traders have been accused of being individually responsible, making millions by manipulating the rand/dollar exchange rate.

However, President Jacob Zuma and the Treasury say the banks involved will still face the consequences if they knew about these actions.

(Edited by Winnie Theletsane)