News agency, Cape Town, South Africa
Saturday February 16th 2019

City moves to frustrate proof of address for informal settlement residents

Doornbach informal settlement resident Nomava Badela was able to open a bank account after her ward councillor signed a proof-of-address form. However, the city has told banks to longer accept such forms. Photo: Peter Luhanaga/WCN

Doornbach informal settlement resident Nomava Badela was able to open a bank account after her ward councillor signed a proof-of-address form. However, the city has told banks to longer accept such forms. Photo: Peter Luhanaga/WCN


Four leading banks have been requested by the City of Cape Town not to accept letters of verification from ward councillors to establish the addresses of residents in informal settlements.

With proof of address a requirrement of the Financial Intelligence Centre Act (FICA) in order to open a bank account or obtain a loan, residents of informal settlements have been asking their ward councillors to provide letters in the absence of utility bills.

But the City administration is putting a stop to this practice.

A City of Cape Town letter addressed to Nedbank, First National Bank (FNB) ABSA and Standard bank, signed by the City’s Chief Financial Officer, states that a complaint had been received from the City of Cape Town Executive Deputy Mayor Ian Nielson that members of the community, who were in the process of applying for loans from financial institutions, approached individual ward councilors to certify that the applicant resides in the area.

This procedure, the letter stated, was “unacceptable and cannot be allowed to continue in the future”.

Verifying residents addresses “ does not fall within the powers and duties of individual councilors,” stated the letter adding,  if ward councilors signed the “documents under duress they are in effect opening themselves to a liability”.

Executive Deputy Mayor Ian Nielson said when residents approached banks to open accounts, the banks issued them a form to take to their local ward councilor to sign it and verify their address.

Nielson said the City had received “a lot of complaints” from councilors who in some circumstances were forced to sign and verify the residents address without in fact knowing the person.

“In a small village it is okay (to verify resident’s addresses) but in a City like this it’s difficult, you can’t know everybody,” said Nielson.

But he said if councilors were approached to act as a commissioner of oath “it does not matter” but the banks were instead asking councilors to guarantee information that the person lives in that township and or informal settlement.

He said the banks have other mechanisms in place to guarantee that their prospective customer indeed lived in a particular area.

A visit to an ANC ward councilor Lubabalo Makeleni office on Friday morning revealed  about 20 from surround informal settlementsseeking to get a proof of address signed.

Doornbach informal settlement resident Nomava Badela, 29, a mother of two children aged three and 13, was one of those seeking her address be verified.

Badela has been lived in the informal settlement for nine years and supports herself by running a fruit and vegetable business.

Badela said she had gone to Nedbank branch in Killarney to open a bank account and she was given a form to take to the ward councilor to verify that she indeed stayed in Doornbach.

She said it was the first time she wanted to open a bank account to save money for her children.

She was helped by Makeleni who verified her residential details on the Nedbank form and stamped it with his stamp declaring his status as a ward councilor and commissioner of oaths.

Makeleni said on everyday of the week, he verified the addresses of up to 120 residents.

He said he feared the City’s instructions to the banks would force residents in informal settlements to revolt against their ward councilors.

“We have files here to prove that these residents stay in this area. We write a standard residential proof of address and people will take it anywhere, we have no control on that,” said Makeleni.

Nedbank spokesperson Soneni Phiri said they had communicated with their branches in their region regarding the City’s instruction and encouraged them to accept other alternate means of residential verification and “to provide awareness of this to our clients”.

ABSA Western Cape Spokesperson Lesley Wyngaard confirmed that his bank received the City’s instructions letter and that there had been discussions between the City and ABSA regarding the matter.

A meeting with the City’s Deputy Executive Mayor had been set for this week to discuss the matter, said Wyngaard. — Peter Luhanga

Tags: Ian Nielson, Lesley Wyngaard, Lubabalo Makeleni, Nomava Badela, Soneni Phiri

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