Despite a recent court judgment which limited the powers and influence of the Prudential Authority (PA) of the South African Reserve Bank (SARB) on Ithala’s operations, depositors are still unable to access their funds.

This was revealed in the bank’s communication to clients, which was issued by the bank’s management. In the notice, the management informed the clients that although the judgment curtailed the powers of the PA, clients would not yet be able to access funds.

In setting aside the section 18(3) execution order, the full bench of the Pietermaritzburg High Court confirmed that the powers of the Repayment Administrator (RA) which acted on behalf of the PA are limited to the preservation and repayment of deposits, which meant that clients’ funds held by the bank are still inaccessible.

However, the ruling granted the bank the rights to deal with Ithala’s non-deposit-taking operations. According to the notice, debtors can pay the bank and insurance claimants can now lodge their claims.

In a statement which was issued by the Premier’s Office, which has taken responsibility for communicating the bank’s matters to the public, the office said that the judgment under appeal dealt solely with the execution of the interim order granted on 9 May 2025 in terms of section 18(3) of the Superior Courts Act. It did not revisit or amend Justice Muzi Ncube’s original order of 13 November 2024 in the counter-application — a declaration and interdict which remain subject to an appeal currently pending before the Supreme Court of Appeal (SCA).

This means that the freezing of Ithala’s Absa accounts remains in force under the Prudential Authority’s section 84 directive, along with the precautionary liquidation application pending the SCA judgement. The judgment reaffirms the framework established by the consent order of December 2023, which provides that:

* Ithala may not accept new deposits beyond those lawfully held;

* any deposits received must be managed under the direction of the Repayment 

“The Provincial Government, through Premier Thamsanqa Ntuli, calls on all parties to respect the rule of law and allow the courts to conclude the appeal process without interference. Commitment remains firm to constitutional principles, sound financial regulation, and the lawful, transparent operation of public institutions in the best interests of the people of KwaZulu-Natal,” read the statement.

Ithala bank’s customers and other stakeholders have been in limbo since December 2023 when the PA did not renew the bank’s exemption certificate, this had allowed Ithala to do the work of the bank without a bank licence. This was followed by freezing of all accounts and the PA then lodged a provisional liquidation application in Pietermaritzburg High Court.

In June, the ANC in KwaZulu-Natal announced that it had secured a deal with Finance Minister Enoch Godongwana, who had agreed to provide a guarantee which was going to save the bank from liquidation, however, the provincial government denied knowledge of such a deal. 

willem.phungula@inl.co.za

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