RAIM condemns SA banks for 'racially biased' account closures

The Resistance Against Impunity Movement (RAIM) on Tuesday said it strongly condemns the ongoing practice  of South African banks arbitrarily closing accounts under the pretext of “reputational risk.”

RAIM stated, "This  practice has disproportionately targeted Black individuals and Black-owned businesses,  serving yet another instrument of economic exclusion and financial sabotage against those seeking to participate meaningfully in the country’s economy. The recent decision by the United States Office of the Comptroller of the Currency (OCC) to end the use of reputational risk as a criterion for banking decisions has set a powerful precedent."

The OCC recognised that allowing banks to use such a vague and subjective measure results in abuse and the unjust denial of financial services to legitimate individuals and businesses.

"South Africa’s financial sector, however, continues to hide behind this excuse to perpetuate racial and economic discrimination. This is not just a banking issue; it is a political and economic crisis. When banks close the accounts of Black entrepreneurs, professionals, and organisations under the guise of reputational risk, they are deliberately stifling economic participation, reinforcing structural inequalities, and ensuring that wealth remains concentrated in the hands of a privileged few," RAIM said. 

RAIM listed the consequences of the actions: 

1. Economic Sabotage of Black Enterprise – The arbitrary closure of accounts disrupts  businesses, making it impossible for them to operate, pay employees, and contribute to  economic growth. This forces many into informal or cash-based operations, limiting their ability  to scale and access critical financial support. 
2. Financial Exclusion and Poverty Entrenchment – Without access to banking services,  Black South Africans are further marginalised from economic participation. This deepens  poverty, unemployment, and reliance on exploitative lending practices. 
3. Destabilisation of Trade Unions and Civil Society Organisations – When financial  institutions selectively target organisations advocating for workers' rights, social justice, and  economic transformation, they are attempting to suppress voices that challenge the status  quo. This is an attack on democracy itself.
4. International Reputation and Investment Risk – If South African banks continue these  discriminatory practices, the country risks being seen as a hostile environment for fair economic participation. This could lead to reduced international investment and economic  partnerships, further weakening our financial sector. 

Call for US intervention and sanctions

RAIM said it calls on the United States government to take a firm stance against these practices by imposing targeted sanctions on South African banks that engage in racialised financial  exclusion.

The movement said it should include: 

1. Investigations by the U.S. Treasury and State Department into South African banks’ role in economic discrimination, mirroring the U.S. stance against financial institutions engaging in unethical conduct. 
2. Sanctions on South African financial institutions that continue to close accounts on arbitrary and discriminatory grounds. These should include restrictions on their ability to conduct international transactions and access U.S. financial systems. 
3. Support for South African regulatory reforms that enforce financial transparency and  accountability, ensuring that no bank can act as a gatekeeper of economic participation based  on racial or political bias. 

RAIM further called on the South African government and regulatory bodies, including the  Financial Sector Conduct Authority (FSCA), to enact urgent policy reforms to end this practice and hold banks accountable for their actions.

"If these institutions refuse to self correct, stronger regulatory measures must be imposed to ensure that financial services  serve the interests of all South Africans, not just a select few.  The struggle for economic justice is a continuation of the fight against apartheid-era  exclusion. Financial institutions should not be allowed to decide who gets to participate in the  economy based on their own subjective and racially biased criteria. RAIM will continue to  challenge and expose these injustices until real economic transformation is achieved," RAIM said. 

BUSINESS REPORT