Latest news with #IthalaBank
IOL News
6 days ago
- Business
- IOL News
MEC Zondi challenges ANC's claims on Ithala Bank customers
KwaZulu-Natal Economic Development and Tourism MEC dismissed ANC claims that it has secured a victory for Ithala Bank customers. Image: Doctor Ngcobo / Independent Media KwaZulu-Natal Economic Development and Tourism MEC Reverend Musa Zondi has accused the ANC in the province of misleading the financially constrained Ithala Bank customers for political point scoring. Reverend Zondi was reacting to the ANC's claim that it had won a significant victory for bank customers — namely, that the bank would no longer be liquidated and that customers would soon be able to access their frozen funds. In a media briefing on Tuesday, the party stated that it successfully convinced Finance Minister Enoch Godongwana to guarantee all depositors. Initially, the minister had agreed to guarantee depositors up to R100,000. The party said this meant that the Prudential Authority (PA) had been removed from the bank's administration, and a liquidation case was off the table. However, this was dismissed by Zondi as a lie and political point-scoring by the ANC. Zondi said that as the main shareholder in the bank, the provincial government knew nothing about what the ANC had told the public, and urged the party to refrain from playing with the feelings of the distraught Ithala Bank customers. In his report to the Cabinet on Wednesday, he said that the PA had appealed the recent Pietermaritzburg High Court judgment, which declared that the bank could restart operations without requiring new deposits, which was the reason why the bank's customers had yet to access their money. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading 'As the KwaZulu-Natal government and as a line manager for Ithala, we know nothing about the so-called groundbreaking agreement between the ANC and the Finance Minister about saving the bank from liquidation. We wish to inform Ithala Bank customers that the matter is still in court and has no new communication from either the Minister or the PA about the matter,' said Zondi. He called on the ANC to show Ithala Bank customers proof of a banking licence or exemption certificate, which he said are the key things that are required by the bank to resume its operations like before. 'The MEC said there are about R3.2 billion of depositors, which are held by the PA. 'Has the PA issued a new exemption certificate or banking licence to Ithala Bank? Has the PA withdrawn its liquidation case in the Supreme Court of Appeal? The ANC must answer these questions,' said Zondi. ANC spokesperson Fanle Sibisi had asked to be sent questions earlier in the day, but has yet to respond to those questions.
IOL News
25-06-2025
- Business
- IOL News
Ithala Bank's future: A call for transformation into a lending institution
Financial expert Dr Sanele Gumede calls on the government to transform Ithala Bank into a lending institution. Image: File To ensure the lasting sustainability of Ithala Bank, the KwaZulu-Natal government must convert it into a lending financial institution, not a commercial bank. This is the view of the University of KwaZulu-Natal-based financial expert, Dr Sanele Gumede. The expert was reacting to the latest intervention by Finance Minister Enoch Godongwana, who has finally agreed to save the bank from liquidation by giving it a full guarantee, which secures the bank's depositors. The guarantee was explained by the ANC provincial leadership as having taken the liquidation process off the table. The party stated that it successfully convinced the minister to guarantee all depositors. Initially, the minister had agreed to guarantee depositors up to R100,000. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Dr Gumede said a government's guarantee was a short-term measure of relief since it will benefit customers who will now access their frozen money from the bank; however, the bank should not celebrate the guarantee since it does not mean it must continue operating as a bank. He said it was not possible that the Prudential Authority would issue another exemption certificate that would allow the bank to operate like commercial banks without a banking licence. The exemption was to allow Ithala to accept deposits and get new customers. 'The guarantee is only saving the bank from liquidation, it simply means a surety that if you fail to pay my creditors, I will take full responsibility and pay them. For me, it's not something to be celebrated since it does not mean that tomorrow the bank will wake up with a banking licence or exemption certificate to continue taking deposits like before. If the KwaZulu-Natal government wants to keep this institution, it must convert it into a lending institution,' said Dr Gumede. KwaZulu-Natal provincial government spokesperson Bongani Gina said the government will continue to fight tooth and nail to get the bank to operate like before, where it was able to accept deposits. ANC provincial Jeff Radebe on Tuesday said it was he, together with coordinator Mike Mabuyakhulu, and the collective leadership of the provincial working committee, which engaged directly with Godongwana to seek a sustainable solution. 'Our intervention was firmly aligned with the ANC's developmental agenda and our responsibility to protect institutions that uplift the people. We are pleased to report that, following these engagements, a breakthrough was reached: Ithala Bank will not be liquidated,' read an ANC statement. To ensure the long-term viability and sustainability of Ithala, Mabuyakhulu said the ANC has proposed several practical and actionable steps, which include: Strengthening governance and internal controls within Ithala. Enhancing compliance with national banking and regulatory frameworks, exploring strategic partnerships that preserve its developmental mandate. Turnaround strategy focused on transparency, accountability, and performance. Reposition Ithala as a Development Finance Institution (DFI). The bank was in a protracted legal battle with the SA Reserve Bank's Prudential Authority (PA), which had filed for provisional liquidation in the Pietermaritzburg High Court. The PA argued that the bank was not complying with financial regulations, which included that it was operating as a bank without a banking licence. This was after the PA had not renewed Ithala's exemption certificate, which allowed it to operate without requiring a banking licence.
News24
25-06-2025
- Business
- News24
‘Ithala Bank will not be liquidated': ANC takes credit for Godongwana's intervention
Mbali Dlungwana/Daily Sun The SA Reserve Bank's Prudential Authority has applied for the liquidation of the troubled state-owned entity, Ithala Bank. However, Finance Minister Enoch Godongwana has agreed to intervene in an effort to save Ithala. ANC KwaZulu-Natal provincial task team convener Jeff Radebe said the minister agreed to step in after party representatives met with him. Finance Minister Enoch Godongwana has been roped in to prevent the liquidation of state-owned Ithala Bank. ANC provincial task team (PTT) convener in KwaZulu-Natal, Jeff Radebe, announced this at a media briefing on Wednesday where he said the decision was made after the party 'engaged in decisive and strategic interventions', including meeting with the minister. 'Our intervention was firmly aligned with the ANC's developmental agenda and our responsibility to protect institutions that uplift the people,' Radebe said. Earlier this year, the SA Reserve Bank's Prudential Authority (PA) lodged an application in the KwaZulu-Natal High Court in Pietermaritzburg for Ithala Bank's liquidation on the basis that it considered the entity technically and legally insolvent. READ | Godongwana's R2bn plan to repay Ithala clients ropes in Kganyago, alienates KZN finance MEC But Radebe said on Wednesday: 'We are pleased to report that, following these engagements, a breakthrough was reached: Ithala Bank will not be liquidated.' He credited the party for the result: 'This outcome is a result of the ANC's leadership, proactive governance, and deep commitment to safeguarding the institutions that serve the economic needs of our people.' What now? 'While this is a significant and welcome development, we recognise that much work lies ahead. To ensure the long-term viability and sustainability of Ithala, the ANC proposes practical and actionable steps,' Radebe said. According to him, these are: Strengthening governance and internal controls within Ithala; Enhancing compliance with national banking and regulatory frameworks; Exploring strategic partnerships that preserve its developmental mandate; Launching a turnaround strategy focused on transparency, accountability, and performance; and Ensuring continuous engagement between the provincial and national government structures to reposition Ithala as a development finance institution. Radebe added that the party was committed to 'preserving' institutions aligned with its vision of social justice, equity, and inclusive development. News24 reached out to KwaZulu-Natal Premier Thami Ntuli for comment. His spokesperson, Lindelani Mbatha, said the premier would address the media at a briefing on Thursday.
The Citizen
20-05-2025
- Business
- The Citizen
Court backs Ithala, but customers say ‘Nothing has changed'
Ithala Bank users remain in limbo despite a recent High Court ruling in favour of Ithala SOC Limited. Customers say little has changed on the ground as they cannot access their funds or resume normal business operations. The Pietermaritzburg High Court ruling, handed down on May 9, interdicted the South African Reserve Bank's appointed repayment administrator, Johannes Kruger, from interfering in the operational management of Ithala. The ruling confirmed that the Ithala board retains full operational authority and that Ithala may carry out all legally permissible transactions, excluding deposit-taking. ABSA Bank was also interdicted from blocking transactions related to salaries and operational expenses. However, for many Ithala clients, the judgment has yet to translate into practical relief. Groutville farmer Zodwa Mthembu said she was devastated to find that she still could not access her accounts even days after the court ruling. 'I went to the Ithala branch in Stanger, and they told me they haven't received the go-ahead to process withdrawals,' said Mthembu. Mthembu, who operates several small businesses through her Ithala accounts, said the shutdown has dealt her a triple blow. 'Since the bank closed shop in January, I've had to survive on personal loans to keep things going. I, too, need rescuing,' she said. Hydroponic farmer and Vella Villa Project founder Mhlengi Ngcobo echoed her concerns, saying that while the legal victory is welcome, the financial damage done over the past few months has been severe. 'We're still in crisis mode. The road to recovery is going to be long and hard. Many of us are small-scale farmers who rely on every cent,' said Ngcobo. Mthembu and Ngcobo are among the 257 000 Ithala depositors left in limbo after the provincial state-owned bank ceased operations in January, after failing to meet banking regulations and financial stability requirements. At least five other farms across iLembe are also affected. Despite operating under special exemptions from the South African Reserve Bank, Ithala never obtained a banking licence and primarily served KwaZulu-Natal residents. A repayment administrator was appointed to manage withdrawals, but legal battles have caused delays, leaving depositors uncertain about how much they will recover and when. KwaZulu-Natal Finance MEC Francois Rodger reiterated his commitment to ensuring the institution is not only protected but restored to full functionality. 'Ithala serves a niche market of mainly rural residents. Attempts to systematically shut it down are short-sighted and demonstrate a total disregard for rural livelihoods,' he said. Rodgers said the Government of Provincial Unity (GPU) will continue engaging with legal counsel to enforce the ruling and support affected communities. Stay in the loop with The North Coast Courier on Facebook, X, Instagram & YouTube for the latest news. Mobile users can join our WhatsApp Broadcast Service here or if you're on desktop, scan the QR code below. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
12-05-2025
- Business
- The Citizen
Prudential Authority to appeal ruling on Ithala Bank liquidation
The KZN government has voiced its support for Ithala. The Prudential Authority has suffered a legal setback in its efforts to liquidate Ithala Bank. The regulatory body, tasked with overseeing South African banks, initiated provisional liquidation proceedings against Ithala earlier this year, prompting the freezing of the state-owned bank's accounts. However, the KwaZulu-Natal (KZN) High Court in Pietermaritzburg delivered a ruling last week allowing Ithala to fully resume its operations. The institution, which falls under the South African Reserve Bank (Sarb), has since confirmed its intention to appeal the ruling. Prudential Authority to appeal Ithala Bank judgment Repayment administrator Johan Kruger is also set to challenge the judgment through an appeal. 'It is important to note that the RA has, in any event, complied with the court's prior order not to take control of Ithala's non-deposit-taking operations. 'However, the RA has been unable to isolate depositor funds from other funds as Ithala has never maintained a separation between its deposit-taking activities and its other business operations,' the institution's statement reads. ALSO READ: KZN Treasury unhappy with Godongwana's R2bn guarantee to Ithala depositors The Prudential Authority further clarified that the court's judgment pertains only to Kruger's role and does not affect the broader liquidation application, which remains pending before the same court. 'The PA awaits the finalisation of the liquidation application.' The authority emphasised that its primary responsibility is to protect the interests of Ithala's depositors. 'In this context, while the PA understands the frustration and difficulty this situation may cause for depositors, the freezing of accounts remains a necessary and prudent step to safeguard the depositors' remaining funds. 'This measure aims to ensure a fair and lawful distribution process of depositor funds while awaiting the outcome of the liquidation application.' KZN government backs Ithala, criticises Prudential Authority KZN Premier Thamsanqa Ntuli had welcomed the judgment, calling on depositors not to panic or engage in a 'run on the bank'. 'As the KwaZulu-Natal provincial government, we wish to place it on record that we strongly oppose any attempts to interrupt the activities and operations of Ithala Bank. 'We believe the claims made by the Prudential Authority are unfounded and appear to form part of a broader agenda to undermine one of the few financial institutions historically designed to serve marginalised communities in KwaZulu-Natal,' Ntuli said in a statement. READ MORE: KZN Treasury at loggerheads with Sarb over Ithala Ithala liquidation The Prudential Authority is seeking Ithala's liquidation on the basis that the bank has been accepting deposits unlawfully. The repayment administrator had declared the institution both technically and legally insolvent. Ithala had historically operated as a bank through several exemption notices issued under the Banks Act, despite never having been granted a formal banking licence. The Financial Sector Conduct Authority (FSCA) suspended Ithala's licence in August 2024 due to concerns over the institution's liquidity. The bank's liquidation could affect at least 257 000 clients. NOW READ: Ramaphosa authorises SIU to investigate Ithala and its employees
