Thank you for the link to that article (dated 9th February 2021). As I understand it, the paragraph you quote is one of a list of items called: "BASA’s concerns include:", in other words, these are the aspects of EWC which make the Banking Association of South Africa nervous, and which they would like to find ways to change.Borrowers will still be liable for the full debt on a property, even if the underlying asset has been expropriated at below market value or without compensation. ... These loan agreements remain valid and binding irrespective of the value realised for the property used as security in support of the loan.
Summary: Expropriation Bill No. 23, 2020 The Banking Association is fully supportive of the state’s initiatives to rectify past racial injustices, to correct current land ownership patterns and to alleviate poverty. We remain committed to playing a leading role in working with key stakeholders...www.banking.org.za
Indeed, the next point includes:
- Any legislation that threatens the repayment of loans owing to banks will undermine a critical sector of the economy and put depositor’s funds at risk.
- If the value of land is reduced by expropriation to nil compensation, or at below market value, banks will have reduced capital against which to extend credit for entrepreneurs and personal development. They will have to adopt more conservative loan policies, which will affect all credit extension, not just property.
For these and the other reasons listed in the article, the EWC legislation will either have to be modified to ensure that the banking sector doesn't go down the drain, or else it will, indeed, crash.
If that latter happens, then even if the property has been redistributed, there will be no banking system in order for any [new] landowner to run a business. Or even if the property all belongs to the government, there will be no banking system left for any international trade. That'd effectively transform South Africa into an island, wouldn't it?