The Banking Association of South Africa - Code of Banking Practice

9.4 Mortgage loans that are NCA credit agreements

For your information

The purchase of immovable property carries a great deal of responsibility.

Your role

Before you purchase a property, you must obtain independent qualified advice on the structure and condition of the property.
You must ensure that the property is adequately insured, including structural/building insurance.
You must inspect the property thoroughly before you buy it, as we are not responsible for determining the integrity or quality of the structure of the buildings or for identifying any visible or hidden defects in the property.
Understand the type of property that you purchase, such as a free-standing or sectionaltitle property, and the difference in rights and obligations associated with these.

Our role

When you apply for a mortgage loan, or when you ask, we will provide you with information about:

the operation and repayment of your loan, including all the charges and costs, the benefits of payment acceleration, additional interest, and costs payable if your account falls into arrears;
the potential impact of variable as opposed to fixed interest rates;
the possibility of losing your property if you do not keep up your loan repayments;
the need to be careful:
when signing building progress payment documents, and
of how building progress payments affect your loan balance;
our role in evaluating the property and how these differ from:
a market valuation,
an assessed security value of the property for our internal purposes, and
the minimum replacement cost of the buildings and improvements for insurance purposes;
how to get external advice or information from the experts on:
the structural integrity of the property,
compliance with local authority requirements, and
replacement costs of the buildings and improvements;
the benefit of paying extra funds into your mortgage loan account with the potential of having access to such funds at a later stage;
the process to follow if you want to settle your mortgage loan account earlier; and
what annual insurance premiums, other charges, and administrative matters you can deal with after you have repaid your mortgage loan in full.

Take note

In terms of the NCA credit agreement and mortgage bond we regard the property as security for the loan, in other words an asset that we can attach and sell if you default on the loan

Term	Explanation
Access credentials	The way you access your digital banking services, including your access code, password, or other unique means of personal identification.
Agent	A third party, either a company or a person, that your bank appoints to render a service. This can include third-party debt collection agencies that collect debts on behalf of your bank.
Applicable laws	Any laws in force from time to time; and any applicable industry code, guidance, policy, or standard enforceable by law; or any order that is set out by a regulator.
ATM (automated teller machine)	A machine that you use to withdraw cash and to access other banking services, including balance enquiries and prepaid purchases.
Banking app	An application on your device that allows you to transfer money from one of your accounts to another, pay bills, see statements and perform other transactions.
Basic banking services	The opening, operation, and maintenance of transactional accounts.

Term	Explanation
POPIA	The Protection of Personal Information Act, 4 of 2013, that aims to promote the protection of personal information processed by public and private bodies; introduce certain conditions so as to establish minimum requirements for the processing of personal information; provide for the establishment of an Information Regulator to exercise certain powers and to perform certain duties and functions in terms of this Act and the Promotion of Access to Information Act, 2000; provide for the issuing of codes of conduct; provide for the rights of persons regarding unsolicited electronic communications and automated decision making; regulate the flow of personal information across the borders of the Republic; and provide for matters connected therewith.
Proliferation financing (PF)	Any act of providing funds or financial services that are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling, or use of nuclear, chemical or biological weapons and their means of delivery and related materials in contravention of national laws or, where applicable, international obligations.
Promotional competition	A competition or game that we conduct for the purpose of promoting our products and/or services and where we distribute prizes to participating winners. Take note Your bank will apply the principles in this Code to a promotional competition where you are a: natural person; OR juristic person; trust or partnership, your asset value or annual turnover is less than R2 million. AND Where the Consumer Protection Act 68 of 2008 applies.

Term	Explanation
NCA credit agreement	A credit agreement as defined in the NCA with a customer to which the NCA applies. Take note Your bank will apply the NCA to a credit agreement concluded with you if you are a: natural person; or trust with one or two trustees (and the trustees are not juristic persons); or stokvel.
Password	A string of characters that allows you to access various services (such as digital banking, your device, or your email account) and that is also used for identification. Take note If there is any occasion that you are given a temporary password, you must change this to your own unique password.
Person	A natural and a juristic person. Take note Where parts of this Code apply only to persons and the pronoun ‘you’ is used, it means persons in that part.
Personal customer	Natural persons or sole proprietor who maintain an account or who receive other services from a bank. Take note Where parts of this Code apply only to personal customers and the pronoun ‘you’ is used, it means personal customers in that part.

Term	Explanation
Fixed interest rate	An interest rate that remains unchanged and not affected by market rate fluctuations for the specified period of the loan or credit agreement or other product.
Integrity	To be accurate, consistent, and reliable.
Interest	The amount we charge you in respect of the amount you owe us; or the amount we pay you in respect of for example, your savings or investment account, usually expressed as a percentage with reference to a period, such as per annum.
Internet banking	An internet-based system that is provided by us and allows you to transfer money between your accounts, pay bills, see statements, and perform other transactions.
Juristic person	Includes a trust, partnership, association, body of persons, body corporate, company or close corporation or similar entities with legal rights and duties either incorporated in or outside the Republic of South Africa, which has legal personality or enjoys a similar status in terms of which it may enter into contractual relations and legal proceedings. Take note Where parts of this Code apply only to juristic persons and the pronoun ‘you’ is used it means juristic persons in that part.
Loyalty credit or award	Any benefit or a right to goods, services, or other benefits (including points, credits, tokens, devices or other intangible or tangible things that can accrue to you) that you can accumulate and entitles you to certain goods, services or benefits that are part of a loyalty programme.

Term	Explanation
Loyalty programme	Any arrangement or scheme where a supplier of goods or services or a similar entity offers or grants any loyalty credit or award in connection with a transaction or agreement to you. Take note Your bank will apply the principles in this Code to a loyalty programme where you are a: natural person. OR juristic person; partnership or trust; and your asset value or annual turnover is less than R2 million. AND Where the Consumer Protection Act 68 of 2008 applies.
Money laundering (ML)	Any activity that has or is likely to have the effect of concealing or disguising the nature, source, location, disposition, or movement of the proceeds of unlawful activities, or any interest that anyone has in such proceeds.
Natural person	An individual and sole proprietor. Take note Where parts of this Code apply only to a natural person and the pronoun ‘you’ is used, it means a natural person in that part.
NCA	The National Credit Act, 34 of 2005, that aims to regulate the business of credit providers and places a variety of obligations on credit providers (mainly aimed at protecting credit consumers), including the prevention of reckless lending practices and measures to enhance disclosure of information to credit consumers.

Term	Explanation
Promotional offer	An offer we make you of a prize, a reward, gift, free goods or services, a price reduction or other benefit, such as a voucher entitling you to a price reduction or other benefit. Take note Your bank will apply the principles in this Code to a promotional offer where you are a: natural person; OR juristic persons; trust or partnership; your asset value or annual turnover is less than R2 million. AND Where the Consumer Protection Act 68 of 2008 applies.
Reasonable	Justifiable and comparable to the service provided.
Sanctions	Restrictions on activities that relate to particular countries, goods and services, or persons and entities. Take note South Africa implements the targeted financial sanctions (TFS) that originate from the United Nations Security Council resolutions under Chapter VII of the Charter of the United Nations (UNSCR). For these sanctions to be given effect FICA requires accountable institutions to freeze property and transactions pursuant to financial sanctions imposed in the UNSCR.
Security	Items of value, such as a mortgage bond registered over a property, share certificates and life policies, which represent assets used as support for a loan or other credit facilities. Take note If you do not repay the loan for which you have provided security, we have the right to dispose of the security.

Term	Explanation
Personal information	Information relating to an identifiable, living, natural person and, where it is applicable, an identifiable, existing juristic person, including, but not limited to: information relating to the race, gender, sex, pregnancy, marital status, national, ethnic, or social origin, and colour, sexual orientation, age, physical or mental health, wellbeing, disability, religion, conscience, belief, culture, language, and birth of the person; information relating to the education or the medical, financial, criminal or employment history of the person; any identifying number, symbol, email address, physical address, telephone number, location information, online identifier, or other particular assignment to the person; the biometric information of the person; the personal opinions, views, or preferences of the person; correspondence sent by the person that is implicitly or explicitly of a private or confidential nature or further correspondence that would reveal the content of the original correspondence; the views or opinions of another individual about the person; and the name of the person if it appears with other personal information relating to the person or if the disclosure of the name itself would reveal information about the person.
Phishing	The fraudulent practice of sending emails or other messages claiming to be from reputable companies to make individuals reveal personal information, such as passwords and credit card numbers.
PIN (personal identification number)	A number that is provided to you or that you choose on a strictly confidential basis, such as a card PIN that will enable you to draw cash and access other services from an ATM or point-of-sale device and that can also be used as an authentication mechanism.

Term	Explanation
Credit agreement	A legal contract in terms of which we lend you a certain amount of money for a specified period or finance movable goods and that outlines the terms and conditions associated with the contract, including your periodic repayments of the loan plus interest or, in the event of a lease, the monthly rental. The NCA does not apply to your credit agreement with your bank if: you are a juristic person (subject to the below principles regarding trusts); or you are a trust with three or more trustees; or you are a trust with one or two trustees, but the trustees are juristic persons; or you are a partnership; and your asset value or annual turnover is R1 million or more.
Customer	A personal customer and an SMME. Take note Where parts of this Code only apply to a customer of a bank and the pronoun ‘you’ is used, it means customer in that part.
Debit order	A mandate, being a written, verbal, or electronic authority that you give to a service provider, allowing a service provider to debit your bank account.
Deposit	Putting money into an account, thereby increasing the credit balance, or reducing any debit balance.

Term	Explanation
Demand guarantee (or on-demand guarantee)	An undertaking (promise) that someone (or an entity), called the guarantor, gives the beneficiary of the guarantee that the guarantor will satisfy (pay) on demand the agreed amount of money (which often relates to the debts of another, called the principal debtor). Take note A demand guarantee is a primary obligation and is not dependent on the existence of any other debt or agreement. Any disputes between the parties about the underlying debt or agreement do not impact this obligation – the guarantee must be paid on demand.
Device	A tablet, cellphone and wearable or similar technology.
Device credentials	Includes but is not limited to: a password, passcode, unlock pattern and login details used as a method of accessing a device or authorising a transaction through a device.
Digital banking	Cellphone banking, internet banking and a banking app or other digital means.
Direct marketing	Us approaching you in person or by mail or by electronic communication, including email, SMS, and automatic calling machines, for the direct or indirect purpose of promoting or offering to supply, in the ordinary course of business, any goods or services to you; or requesting you to make a donation of any kind for any reason. Take note An automatic calling machine makes automated calls without human intervention.
Dormant account	An account on which you have initiated no activity for a period that we have established in advance and in accordance with the rules relating to the specific type of account.

Term	Explanation
Cardholder	A customer who has a card, or a secondary cardholder linked to the account of the customer.
Charges [or fee(s)]	An amount or amounts that we can charge in respect of a transaction, product, an account, or a service that we offer.
Conduct Standard for Banks, 3 of 2020	The standard that applies to banks in relation to our provision of financial products and financial services. The aim of the standard is to make sure that we treat you as our customer fairly in accordance with six treatingcustomers- fairly outcomes, namely: Outcome 1 – Fair treatment is central to the culture of banks; Outcome 2 – Products and services in the retail market that are sold and marketed are designed according to the needs of the customers identified and targeted accordingly; Outcome 3 – Customers are provided with clear information and kept appropriately informed before, during and after point of sale; Outcome 4 – Advice is suitable and according to the customer’s circumstances; Outcome 5 – Service is of an acceptable standard and products perform as customers have been led to expect; and Outcome 6 – Customers do not face unreasonable after-sale barriers when they want to change a product, switch providers, submit a claim or make a complaint.
Contact details	Details that you have provided us with to contact you, such as your address, email, telephone, and cellphone information. Take note We require your address to send you communications and notices, including legal notices.

Our products

9.4 Mortgage loans that are NCA credit agreements

For your information

Your role

Our role

Take note