Making your bank manager happy
In the world of banking you are able to build up a good name, simply by keeping your credit record pristine. This good behaviour becomes an important asset for the business.
- Make sure your bank manager understands your business – not necessarily every detail, but basic principles – the cash-flow dynamics and any risks that the business has to face. Provide a copy of your latest business plan if you have made any new changes.
- Banks don’t like nasty surprises. If the business is experiencing difficulties it’s important that you inform your bank manager as soon as possible especially if your obligations to the bank will be compromised.
- Banks make use of credit ratings to evaluate your ability to repay them. Good credit ratings allow you to use your good name as a bargaining chip to negotiate the best possible deal if you need to borrow money from them.
- It’s important that you meet your bank manager in person, and meet regularly – especially if you wish to cultivate a long and beneficial relationship with your bank.
What is a loan review?
A loan review is “follow-up monitoring” of a loan or extension of credit by a bank.
When does a review take place?
There is often nothing to worry about when the bank contacts you for a “loan review”; in fact it’s a good thing. If you have conducted a loan account in accordance with the terms of the loan and made repayments on time, the bank might call a loan review to offer a client a better interest rate, better terms, or because a loan has reached a point where it requires re-negotiation. Banks make use of credit ratings to evaluate your ability to repay them. Good credit ratings allow you to use your good name as a bargaining chip to negotiate the best possible deal if you need to borrow money from them.
Can a deceased bank account attract charges and penalties?
According to Nedbank’s Deceased Accounts Division, the estate of a deceased person is charged fees and penalties, and will also earn interest if the account is in credit, until the bank has received notification of the death. The Executor of the Estate, or a person who has Power of Attorney, must supply written instructions to freeze the account.
Formal notification includes a written instruction informing the bank of the death and requesting that the account is frozen. The death certificate must also be supplied with the formal notification.
The Executor must also liaise with third parties who operate debit orders on the account and formally inform them of the death and provide the necessary proof. Otherwise debit orders and stop orders will continue to go through. If there isn’t enough funds to meet the debit orders, penalties will be imposed until the account is frozen.
The estate is liable to pay outstanding fees. If someone dies without leaving a valid will, the estate will devolve in terms of the rules of intestate succession, as stipulated in the provisions of the Intestate Succession Act, (Act 81 of 1987) and the descendant/s who inherit the intestate estate will be responsible for the bank charges which were acquired prior to the formal notification being supplied to the banking charges.
Can a frozen bank account of a deceased estate still receive income? Some funds due are medical aid refunds and a balance of a pension from overseas If an estate is owed benefits from a pension fund or medical aid, these can definitely be paid into a frozen account”, says Werner Botha, Estate Administrator at FNB. An Executor looks after the administration of a deceased estate.
If there is a last will & testament, the executor will ensure that everything runs smoothly and in accordance with the law. The executor’s functions include:
- Taking control of the assets which form part of the estate
- Identifying the beneficiaries in the estate
- Carrying out the legislative requirements regarding the administration of the estate
- Paying the debts and the administration expenses
- Attending to the final income tax return
- Distributing the balance of the estate to the beneficiaries
- Beneficiaries received payouts directly
“However, where a beneficiary has been appointed on a life assurance policy such as a pension, the benefit under that policy will be paid directly to the beneficiary and will not form part of the estate”, explains Botha. “The benefit will, however, be added to the value of your estate for the calculation of estate duty. Policies that have no beneficiaries will be paid to the estate.”