The Department of Housing is to hold the Community Reinvestment Bill "in abeyance" until the financial services charter is finalised, housing spokesperson Mandla Mathebula said yesterday.

The comment was in reaction to a Congress of SA Trade Unions (Cosatu) claim that the government planned to scrap the draft bill.

"The minister (Brigitte Mabandla) is holding the bill in abeyance in order to consider it within the context of the financial services charter," he said.

Mabandla told Parliament earlier this year that the measure, which aims to force banks to provide finance for housing in disadvantaged areas, would be finalised by Parliament before the end of this year.

The draft bill aims to outlaw ‘geographical red-lining’ by banks, the practise of refusing people loans because they live in certain areas.

It was withdrawn from the parliamentary process for more consultation last year after opposition from the banking community.

Cosatu said in a statement it had been "given to understand", during in engagements at the National Economic Development and Labour Council (Nedlac) that government planned to "withdraw" the bill.

"Instead of using its own power, government now wants to rely on bilaterals with the financial sector through the financial sector BEE charter process.

"This process is closed, secretive and exclusive, and cannot replace action by the democratic state with co-operation from Nedlac," Cosatu said.

The empowerment charter for the banking sector is expected to be unveiled shortly. – Sapa.