Non-Fica accounts needed

We are about to enter a food crisis. Trying to feed millions of people via food parcels is not effective as it attracts huge, desperate crowds who simply spread the virus.

The logistics are insuperable, but there is a better way: use our advanced financial system and pay survival amounts into all bank accounts. But there is a problem: our Financial Intelligence Centre Act (Fica) rules, designed to contain money laundering and crime syndicates, exclude the poor because they often lack ID cards and fixed addresses and seldom have proof of address.

Illegal immigrants do not qualify, but they still need to eat. We cannot expect millions of workless migrants to fast until such time as we can send them back over the Limpopo.

The answer is simple. Introduce non-Fica bank accounts. The new digital banks — some with kiosks in shopping centres — could facilitate this.

To prevent an individual opening multiple accounts, biometric controls would be required. To address the crime problem, we could limit the maximum permissible balance in non-Fica accounts to, say, R5,000, and also provide that monthly movements on such accounts be restricted to the same amount.

If nearly all adults have bank accounts (Fica or non-Fica, but never both) this will facilitate instant drops of money that reach everyone.

Only about 20% of South Africans could be regarded as rich. Therefore it would not matter much if some of these also receive the money. To limit such leakage, it could be provided that only accounts with an actual balance (or overdraft facility) of under about R10,000 would qualify. This would exclude most of those not in need.

Via e-mail