President Jacob Zuma addresses the Opening Plenary of the High-Level Meeting of the United Nations General Assembly on the migration in New York, United States of America. Photo: GCIS
President Jacob Zuma addresses the Opening Plenary of the High-Level Meeting of the United Nations General Assembly on the migration in New York, United States of America. Photo: GCIS

THE only way VBS Mutual Bank can disclose details on President Jacob Zuma’s home loan — or, for that matter, the major banks explain why they withdrew their services from business entities owned by the controversial Gupta family — is if it was forced to do so by the courts, bankers say.

The loan granted to Zuma to repay R7.8m for nonsecurity upgrades to his Nkandla residence has raised questions about how he qualified for it, given his age and income. VBS has said it applied its usual criteria in granting the loan.

Unless bank official leaks details of the loan — and bankers in SA are unlikely whistle-blowers — we are not likely to ever know the terms of the deal.

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Most of the big four banks (FNB referred questions to an independent academic) pointed to different case law for reasons banks keep client information and transactions secret.

"A bank owes a duty of confidentiality and secrecy towards its customers," Nedbank spokesman Esme Arendse says. "Banking secrecy is founded on legislation, contract and the protection of privacy.

"Secrecy also has a contractual foundation and is seen as an express or implied term of the bank and customer contract.

"However, contractual obligations are not the only foundation of bank secrecy, because a bank may also not reveal information concerning a prospective or a past customer. Banks are in fact obliged to keep all confidential information secret, whether it relates to a customer or anyone else."

Ross Linstrom, spokesman for Standard Bank, also says common law and statute require banks to keep banking transactions secret.

An Absa spokesman says: "Fundamentally there is a general principle about the right of privacy for all individuals and juristic persons who enter into contractual arrangements with a commercial entity such as a bank."

One of the cases both Arendse and Linstrom cite, where a court ruled that banks have a contractual duty to keep customer information confidential, subject to a few limited exceptions, is Tournier v National Provincial & Union Bank of England, a UK judgment adopted by South African courts.

The voluntary Code of Banking Practice, issued by the Banking Association of SA, also requires banks to keep client information confidential.

But the Tournier judgment leaves open the following loopholes for third parties looking to break into the confidential banker-client relationship:

• where disclosure is under compulsion by law;

• where there is a duty to the public to disclose;

• where the interests of the bank require disclosure; and

• where the disclosure is made by the express or implied consent of the customer.