Pricey ATM fees back as lockdown eases to level 3

As more people return to work with the Covid-19 lockdown easing to level 3, the banks have reintroduced high charges for failing to get to your own bank’s ATM to withdraw money.

If you draw from another bank’s ATM, you will now again incur fees of up to R21.50 per R500 withdrawal.

South African banks, which agreed to waive ATM cash withdrawal and Saswitch network charges given the restrictions on travel during the coronavirus lockdown, will no longer absorb these costs, the Banking Association SA (Basa) said in a statement.

Normally, if, for example, you bank with Nedbank and make a cash withdrawal from say an FNB ATM, you would pay the usual withdrawal fees as well as a punitive Saswitch fee for using another bank’s ATM. But these were waived while the country was under level 4 and 5 lockdown, helping individual customers save almost half of what they would have paid in withdrawal fees.

However, drawing money from a shop such as Pick n Pay or Checkers has remained much cheaper even than using an ATM affiliated to one's own bank.

Basa says its member banks have granted almost R14.5bn in total relief to customers since the lockdown started in late March to May 23, R3bn of which was extended in the last two weeks to May 23 to individuals experiencing financial distress.

“This amount will continue to grow as banks process applications for Covid-19 debt relief,” it says.

However, “prudent business practice now requires that banks recover the cost of maintaining and operating ATMs and point-of-sale (POS) networks to ensure the sustainability of these operations”, Basa says.

According to Basa, local banks have received applications for relief from individuals for more than 2.46-million credit agreements. So far, more than 2.15-million have been granted.

On the small-business front, South African banks have granted relief of R10.26bn. That excludes the R100bn Covid-19 loan guarantee scheme.

“Cash flow relief for eligible businesses and individuals is an important part of keeping the economy functioning and preserving companies and jobs during the Covid-19 pandemic and national lockdown.

“The cumulative cuts in interest rates by the SA Reserve Bank, which reduced the prime interest rate to 7.25%, has also been a significant source of debt and cash-flow relief for business and individuals,” Basa says.

The banking association says although banks understand that the Covid-19 lockdown has increased the financial stress of many of their customers, it is in the best interests of all customers to continue to meet their obligations as best they can, as the relief measures granted by banks do not envisage any debt write-off, but rather leniency in terms of the repayment of loans.

“Banks hold in trust the salaries and savings of SA’s workers, professionals and businesses. Our customers are both depositors and borrowers. Deposits extended as home and personal loans, among others, must be recovered to allow banks to repay, with interest, customers who expect their money on demand,” Basa says.

In the public interest, most of our coronavirus news isn’t behind our paywall, and is free to read. To support our mission of delivering award-winning, independent local news, subscribe from as little as R45 per month by clicking here.