Kutwa Tuesday: Banking Brief's (Jan 15)

CFC on hold?
Could the ongoing political crisis be giving Standard Bank of South Africa second thoughts about its approved merger with CFC? A decision by the Reserve Bank in SA to conclude the deal is also overdue.

Dangers of insular banking
Our banking history is littered with the remains of Daima Bank and other indigenous African and Asian banks. Most went down due to malpractices by directors and managers, but also in-lending to close circle or community companies who as a group could be potentially exposed to a singular risk.

The banks also engaged in subtle discriminatory practices like charging outsiders higher rates, frustrating their loan applications or facilities, or making them feel unwelcome - which ultimately proved to be counter productive as locking them out increased the risks that the banks faced by increasing their exposure and dependence on a core group or sector.