Major banks defend lending practices amid accusations from MPs of racial profiling, lack of transformation

CAPE TOWN - Major banks have defended their lending practices in Parliament, as members of Parliament (MPs) accused them of racial profiling and a lack of transformation.

The country’s biggest banks and lenders appeared before a joint portfolio committee on trade and industry as well as finance on Tuesday.

The institutions defended their track records on transformation.

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CEOs from the country’s biggest banks took part in a rare meeting with MPs, where they faced a barrage of questions about their business practices.

MPs told the CEOs from FNB, Investec, Standard Bank, Capitec, and Absa that one of the biggest concerns was around providing credit, accusing their criteria of being racially biased.

"It’s a general theme amongst the members around the matter, the allegation about racial profiling, which, of course, is informed by history. The history is that Black people don’t have assets," said African National Congress (ANC) MP Lufefe Mkhutu.

Standard Bank CEO Kenny Fihla said they believed their lending criteria was fair, even on AI systems.

"We are at the moment comfortable that our lending criteria and decision processes are objective and fair. It doesn’t mean they are perfect."

The committee wants a follow-up meeting with the sector to address any unresolved issues around transformation and providing credit.