Bank Infrastructure Recovery

Publication Date: 07/08/2021

Banks, retailers and the South African Post Office did not report any major incidents in the distribution of social security grants or payment of salaries at the start of August 2021, despite the extensive damage to banking infrastructure in KwaZulu-Natal and parts of Gauteng in the recent unrest.

Banks and their partners worked together to ensure that there were mobile automatic teller machines (ATMs) and cashpoints even in those areas where banking and retail infrastructure had been completely devastated. Cash-in-transit companies were able to ensure that cash was available wherever it was needed. There was noticeable demand for grant payments at pay-points where retailers were able to restore their operations and provide essential goods.

To assist social grant recipients and those who live in areas where ATMs and branches have been destroyed, bank customers have been able to use any ATM, including those not operated by their own bank, without incurring additional charges, since 01 August 2021 until 30 September 2021. This resulted in grant recipients making wider use of ATMs and reduced pressure on individual cashpoints.

Banks, together with other stakeholders, are working with the South African Social Security Agency (SASSA) to assist with the re-introduction of the R350 Covid-19 Social Relief of Distress Grant. SASSA is encouraging its beneficiaries to open bank accounts so that they can receive their grants directly. Many banks have products that are appropriate for grant recipients.

Over 1 400 ATMs and 269 bank branches were vandalised or destroyed in the unrest. Banks are still in the process of developing their infrastructure recovery plans. An indicative average replacement cost of an ATM in South Africa is R385 000, with additional installation costs. These costs can vary greatly for any individual ATM and not every vandalised ATM will need to be replaced.

Banks will likely have to rebuild almost 200 branches. At this time the average indicative cost for rebuilding a branch is estimated to be R4,3 million. There will also be additional operational costs to get a branch back into full service.
Full recovery of physical bank infrastructure will take a while and banks are encouraging their customers to use digital banking platforms to access their products and services.

Banks have begun detailing the relief they can offer to individual businesses and customers who are in financial distress because of the damage and looting. Customers who were in good standing before the unrest should contact their banks as soon as possible to see how they may best be assisted.