Annexure D — Consensual Debt Restructuring Rules

Debt counsellors in law at present can propose to the courts and the courts can impose the extension of repayment terms and deferment of repayments on certain debts to release affordability to settle other debts in order to enable the consumer to rehabilitate from a debt distressed situation.

The concessions will be introduced conditionally in the market by the industry. The conditions to be applied include:

a. Key features are:

a. The upfront waiver of any transactional or other non-finance charge related fees related to debt facilities as well as waiver of interest penalties etc. on pre-NCA agreements.

The proposed term limits (established with a view to offer the consumer a reasonable rehabilitation horizon) are outlined in the table below:

The rules (and any other rules of this nature) require sophisticated system support to implement effectively. The summarized rules are in the process of being converted by the banking industry in conjunction with the system providers of debt counsellors into detailed specifications for the development of the necessary systems application. Deployment in the market will accordingly take some time.