SA banks freeze Zep holders' accounts

South African banks have frozen the accounts of Zimbabwean Exemption Permit (ZEP) holders, claiming it was a system error. However, the sudden account freezes have caused significant distress, with ZEP holders unable to make transactions and facing uncertainty over their financial futures.

According to reports, ZEP holders began experiencing frozen bank accounts in early January, with many receiving no prior notification. Gabriel Shumba, legal director of Global Immigration and Legal Consultancy, confirmed the freeze, stating:

"We are delighted that the bank has acknowledged its mistake because these are issues that affect the livelihoods of people. We urge institutions not to make hasty decisions without first establishing the legal status. It is even more reprehensible if they freeze accounts without prior notice, as such behaviour might be seen as predatory and xenophobic in nature."

Shumba emphasized that banks and employers should consult legal advisers before making such decisions, highlighting the potential legal repercussions of such actions.

Simba Chitando, a Zimbabwean human rights lawyer based in South Africa, echoed similar sentiments, stating that the freeze seemed more like a system error rather than an intentional act of malice.

"We urge the banks to address this issue urgently and unblock these accounts so that we can avoid having to go to court to force them to do it," Chitando said.

Many ZEP holders reported their accounts being frozen at Capitec, although the bank quickly resolved the issue, assuring account holders that transactions could continue as usual. However, other banks have yet to fully address the matter.

In December, FNB had requested ZEP clients to renew their permits, suggesting they apply for permit waivers or work visas. Following this, South Africa's Home Affairs Minister, Leon Schreiber, extended the ZEP for an additional year until November 28, 2025. Despite the extension, ZEP holders remain uncertain about their financial futures, as banks have not updated their systems to reflect the extension.

Chitando advised affected ZEP holders to take a copy of their ID or passport along with a printout of the Government Gazette notice extending the validity of their ZEPs to their banks. He warned that legal action would be considered only if banks continue to refuse to resolve the issue.

"This is not the first time ZEP holders have had their accounts frozen. In past instances, holds were lifted under legal pressure. However, this latest freeze has caused significant panic, affecting thousands of individuals who rely on these accounts for essential transactions," Chitando added.

FNB's head for Foreign Nationals and Non-Resident Banking, Stanton Govender, stated that the bank had noted the Department of Home Affairs' extension and was assessing its impact on customers. He assured that any updates would be communicated to customers directly.

"We are committed to helping our customers ensure that their bank accounts are managed in accordance with the relevant laws. Customers can also contact us directly for any assistance with their accounts," Govender said.

As the situation continues to unfold, ZEP holders are urging banks to swiftly resolve the matter and ensure that their accounts are accessible, allowing them to maintain access to essential services.