Do you want to know the procedures, challenges, or restrictions that one can face during banking or financial litigation in South Africa? If so, then we’ve got you covered!
As a customer, if you have faced unjust treatment, misrepresentation of the contractual conditions, or have not received the due transactions or goods that were guaranteed. Then you may need to take action against the financial institutions.
The blog will share a straightforward guide to help you understand the basics to deal with such situations. Even if you’re in the process of signing a contract with a financial/banking institution, these rules will help avoid any infringement.
What is Banking and Financial Litigation?
Banking and financial disputes generally occur due to conflicts and mismanagement regarding a transaction, operational matters, stock exchange, and pricing issues between customers and financial institutions.
Especially in South Africa, the local laws have posed more challenges in transactional processes. Some of the issues that have become common to cater to are transaction timeline and tight budget costs.
Banking and Financial Litigation in South Africa
Here is what you need to know about banking and financial litigation in South Africa, including procedures, and requirements.
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Bank Act and FSR
In South Africa, there are different statutes like Bank Act and FSR (Financial Sector Regulation) that regulate the financial and banking institutions.
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Financial Institution Must be Licenced
A financial institution should be registered or have acquired the licence to provide financial services/products. Any violation of these terms will lead to the failure/breaching of the terms of the contract. Also, a financial institution must run an in-depth investigation of the client’s financial matters.
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National Credit Act
According to the National Credit Act, both parties must resolve their conflicts with each other and should only contact the Consumer Tribunal ((adjudicative entity) if there is no other way of handling the dispute.
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Financial Cases
In order to deal with financial cases, there are no specific High Courts. Only some High Courts have set up “commercial divisions” for hearing commercial cases. While some administrative or quasi-legal entities are formed according to the statute.
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National Consumer Tribal (NCT)
One such legal body is National Consumer Tribal (adjudicative entity) which is responsible for dealing with disputes related to financial services.
The NCT consists of a chairperson and other members (10-16) having an academic qualification related to economics, commerce, or the law.
If you want to file a dispute regarding any violation in the High Court, there are no specific rules. However, the National Consumer Tribunal has its own rules to proceed depending upon the manner of hearing (public, or informal etc). Moreover, there are also some rules specified by the Financial Services Tribunal if the applicant wants to file against the decision made by the respective body under the FSR Act.
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Pension Funds Adjudicator
The Pension Funds Adjudicator, another legal professional, selected by the Minister of Trade and Industry can handle individual cases related to pensions.
Importance of Obtaining Professional Legal Representation
It’s advisable to seek a professional lawyer as they are skilled and have experience dealing in different financial and banking matters. They will provide and guide you in all the legal matters that you can face during banking and financial litigation.
Final Takeaway
With increasing regulations in the financial/banking industry, borrowers and lenders are facing more difficulty in seamless transactions, lending acquisition, and recovery of funds. Thus, you must have an insight into the financial and banking litigations to deal with these matters appropriately.
However, it’s always recommended and essential to consult a professional litigation expert to effectively address the situation.