Standard Bank and Nedbank were criticised by trade union Solidarity on Friday for lacking compassion when it came to clients in distress.

"The two banking groups are still refusing, after two months, to give their support to the nearly 10 000 employees of the bankrupt mining company Pamodzi Gold, which is under severe financial pressure," Solidarity said.

The union said that at the end of March 2009 it sent its first letter to the country's four largest banking groups - FNB, Absa, Standard Bank and Nedbank.

Pamodzi crisis

The letter appealed to the banks to take the crisis raging at Pamodzi Gold into consideration and not to penalise employees for the late payment of debit orders.

The trade union asked the heads of the banks for their commitment that, in light of Pamodzi's problems, the banks would scrap and pay back penalties on late payments.

"During this period, the mine management repeatedly had employees under the impression that their salaries would in fact be deposited," Solidarity said.

The union said it had again sent letters to the heads of Standard Bank and Nedbank, "but to date the trade union has still not received any reaction from those banks".

Solidarity said it did, however, receive positive feedback from FNB and Absa.

"According to a letter from Sizwe Nxasana, chief executive officer of First Rand Bank, the banking group supports the employees and they have committed themselves to paying back all penalties levied on declined debit orders on employees' accounts up to the end of July this year," the union said.

Keith McIvor, Absa's managing officer for transactions and deposits, had also responded to Solidarity's request and said that one-on-meetings with Absa clients working at Pamodzi had to take place as soon as possible.

"He also suggested clients review their contractual agreements for debit orders and contact the companies concerned in order to defer or reduce payments or cancel the contracts," Solidarity said.

The trade union said it was "disappointed with the reaction from Standard Bank and Nedbank".

It said these two banks were "watching their clients who work at Pamodzi suffering under the strain of unfair penalties on rejected debit orders".

Solidarity said some Pamodzi employees had had penalties of as much as R1500 charged on their accounts as their debit orders could not be paid.

Competition Commission

"Apart from this, a study by the Competition Commission has already shown that banks charge up to 23 times more per rejected debit order than the actual cost of an unsuccessful transaction," the trade union said.

Meanwhile, the provisional liquidators were still attracting prospective buyers to Pamodzi Gold's mines, Solidarity spokesperson Jaco Kleynhans said.

"The Free State mine has been placed on care and maintenance in order to protect the mine's integrity as an asset.

"Production at the company's Springs mine on the East Rand is, however, continuing on a small scale, but still not enough is produced to pay the employees' salaries."

The expiry date for the provisional liquidation is May 26, the union said.

Standard Bank said it could not comment as its deputy CE was in a meeting.

Nedbank said it was "investigating".

Sapa

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