FAQs

Nedbank clients can find the new South African Rand Overnight Index Average (ZARONIA) published daily by the South African Reserve Bank (SARB) Prudential Authority (PA) at the following website:

SARB PA ZARONIA Market Rate

The final date when the use of JIBAR will end must still be determined.

This date represents the ultimate date during the overall industrywide migration programme and all stakeholders (all lenders and borrowers exposed to JIBAR) must be ready for this key event.

This event will trigger fallback language to orderly migrate transactions from JIBAR to ZARONIA where the necessary provisions exist in the applicable financial contracts.

The final date for the last publication of JIBAR must still be determined formally by regulators and will be communicated to all stakeholders in due course.  

Although ZARONIA will be close to the existing JIBAR, their construction and fundamental calculation methodologies are different.

The Credit Adjustment Spread (CAS) is a standardised industry approach, endorsed by the SARB PA, which quantifies the difference between JIBAR and ZARONIA based on historical differences.

The CAS is expected to be used in the orderly migration of previously concluded (or legacy) transactions between Nedbank and its clients to ensure no inappropriate transfer of value occurs to either party.

The CAS regulatory endorsed methodology can be found here:

SARB MPG JIBAR Fallback Methodology Recommendation

The CAS rates suitable for JIBAR benchmark reform has been calculated and published daily on the Bloomberg FBAK page since March 2025. The necessary CAS rates will be communicated by Nedbank to its impacted clients who need the migration of legacy contracts at the appropriate time.

The purpose of benchmark reform is to improve the integrity of the reference rate used in banking facilities or loans and is not intended to make the pricing of products either cheaper or more expensive.

The various mechanisms (such as CAS) to be utilised by Nedbank is to ensure that the overall cost or price of banking facilities or loans are comparable between JIBAR-referenced banking facilities or loans and ZARONIA-referenced banking facilities or loans.

Differences are likely to occur based on different methodologies, banking facilities or loan variations or conventions. However, these should be minimised as liquidity grows in the new ZARONIA replacement rate.

As part of the overall regulatory migration programme for the orderly movement towards ZARONIA as the successor rate to JIBAR, certain periods of time have been identified in the overall plan in which Nedbank and all other relevant market participants who offer JIBAR-referenced banking facilities or loans, will be expected to offer in parallel the choice of the new ZARONIA alternative.

This period, known as the ‘ZARONIA First Initiative’ for the relevant market, is intended to create liquidity, offering clients a choice between the existing JIBAR-referenced banking facilities or loans, or the newer ZARONIA equivalent.

This time will allow clients a window period to adjust to the new product offerings without having a cliff effect of not having the traditional JIBAR offering as a fallback.

ZARONIA will precede the eventual cessation of the offering of JIBAR-referenced banking facilities or loans, and eventually also the discontinuation of the benchmark rate itself.

An important difference between JIBAR and ZARONIA relates to the window of time applied to the calculation of an interest accrual period for a given benchmark rate.

JIBAR is quoted on a forward-looking term basis, meaning that the interest rate is suitable for a respective period into the future. This period is normally 3 or 6 months, or even longer, if needed.

ZARONIA is calculated and published as a simple overnight interest rate, so its default period is for a day only. To convert ZARONIA to a comparable longer period, some form of compounding of interest must occur.

Legacy transactions in the context of JIBAR benchmark reform refer to any transaction concluded between Nedbank and a client that has a tenor, maturity or expiration date after the JIBAR cessation date that must still be published by the SARB PA and note the reference to JIBAR in its interest calculation.

Legacy transactions represent the transactions between Nedbank and its clients that will likely need a form of engagement and remediation in the contractual wording to replace the reference to JIBAR with that of ZARONIA at the appropriate or agreed time.

Clients who have exposure to these banking facilities or loans should take extra care and practice due diligence as they are highly impacted by JIBAR benchmark reform and subject to a range of risks.

In financial contracts that reference JIBAR, the inclusion of the necessary wording in the contract that will automatically migrate the interest calculation from JIBAR to the newer ZARONIA upon the occurrence of the JIBAR cessation date (the trigger event), is said to contain suitable fallback language for JIBAR benchmark reform – i.e. Nedbank and a client have pre-agreed to the terms and conditions to move towards ZARONIA in the future and require no further outreach or remediation.

Yes.

While the change from JIBAR to ZARONIA is expected to apply to most JIBAR-referenced banking facilities or loans, it is not compulsory and clients may choose to migrate to either a fixed interest rate or Nedbank’s prime rate), whatever is suitable to a client’s needs and agreed to with Nedbank. This decision can occur in the remediation and outreach process, if needed.

Nedbank has established a dedicated JIBAR benchmark reform programme that has been preparing and coordinating its internal changes required to support the successful transition to ZARONIA-linked banking facilities or loan offerings. As part of this programme, a detailed contract remediation and client outreach phase is planned during which the bank will reach out to clients to perform the necessary remediation of legacy transactions before the JIBAR cessation date. This may involve either the immediate restructuring of a product offering to ZARONIA, or the insertion of the necessary fallback language to perform an automatic migration at a later stage.

There are a couple of steps clients can take in advance to prepare, like the following:

• Review their current suite of JIBAR-referenced banking facilities or loans to see if they are exposed to local benchmark reform.
  
  
• Follow industry communications released through the SARB PA and their ZARONIA website (listed below) regularly to determine the status of the overall reform progress and timelines.
  
  
• Engage with their legal, tax, accounting or financial adviser(s) to determine the potential impact of the benchmark reform.
  
  
• Consider any technological or system changes required to accommodate the calculation of interest based on ZARONIA and not JIBAR in line with the white papers available on the SARB PA website.

Nedbank clients who have questions or concerns about JIBAR benchmark reform must contact their bankers or email NedbankJIBARReform@Nedbank.co.za.