Nedbank Namibia says it will have to review its existing products as response to the amendments to the Credit Agreement Act, which was gazetted this week Wednesday, essentially abolishing the zero percent deposit on the purchasing of vehicles through credit institutions.
The new amendments come into force on August 1, and will also mean that banks can no longer extend to customers credit facilities for repayment of the vehicle financial loan scheduled to instalments of 60 months.
The new legislation will instead require clients who purchase vehicles through banks and other financial institutions to produce a deposit of at least 10 percent when financing new vehicles. Also, the maximum period of repayment on financed motor vehicles is now limited to 54 months from the date of delivery.
“For Nedbank as a business, the amendments mean that existing products will need to be reviewed and operational developments will have to be deployed in order to provide for the new maximum periods. In the meantime, our current special offer on vehicle finance, which includes a zero percent deposit and 60-month repayment option, along with financing at prime -1.5 percent, will continue until July 31, 2016 as planned,” said Nedbank Namibia in a statement received this week.
Other commercial banks are yet to comment on the new amendments.
The penalty for contravention of these regulations has been increased to N$50 000, from N$5 000, or an amount equal to the deposit payable as required by the Act, or imprisonment for a maximum of two years or both fine and imprisonment.
The Act was amended to improve the definition of what is meant by ‘leasing transaction’, to broaden the limitation on the power of the Minister of Industrialisation, Trade and SME Development to determine the application of the Act to certain agreements, and to increase the penalties applicable.