Masondo raised the concern during a briefing to Parliament’s Standing Committee on Finance on Friday, where Public Investment Corporation (PIC) management also outlined the latest developments at the state-owned asset manager.
He emphasised that the existing accounting framework is creating distortions that lenders are compelled to follow, with negative consequences for credit quality.
He told the committee that these constraints are at the core of recent debates surrounding lending trends, arguing that the issue is often misunderstood or overlooked in public reporting.
“These accounting constraints make it compulsory for banks and other lenders to behave in ways that are inappropriate in our view, and this is the point we think the media are missing when they report on this issue,” Masondo said.
He added that the PIC and National Treasury teams are continuing to examine the matter and will provide a deeper analysis. Addressing the constraints, he argued, is essential to reducing credit losses across the financial sector.
“The team will further deliberate on this just to make the point that as long as we do not deal with the issue, the credit loss ratio will still be there. We are making sure that our lending practices have improved,” he told members of parliament.
–SABC/ChannelAfrica–
