Ithala Bank depositors to regain access to funds just in time for Christmas
The financially constrained Ithala Bank depositors will finally access their funds after the National Treasury released a long-awaited R2.2 billion guarantee.
In a media briefing on Monday in Durban, KwaZulu-Natal Premier Thamsanqa Ntuli announced that the National Treasury has finally released the guarantee and all depositors will be paid before Christmas.
More than 250,000 Ithala Bank customers have been in limbo since 2023, when the South African Reserve Bank’s Prudential Authority (PA) took control and froze all the bank accounts. The PA declared the bank insolvent and applied for a provisional liquidation.
Announcing a relief, Ntuli said the approval of the guarantee means that the PA’s liquidation will cease and all customers will receive their funds.
“Ladies and gentlemen of the media, I am pleased to announce that we have reached a historic breakthrough. We have successfully concluded all agreements required to begin the repayment of Ithala SOC Limited depositors. This milestone removes the final legal and administrative barriers and ensures that depositors will begin accessing their funds before Christmas,” said Ntuli.
The premier apologised to depositors, businesses, and all those affected by the bank’s issues. He promised that the government would ensure that such disruptions would not occur again.
He described the bank as more than just a financial institution. It stands as one of the province’s most important pillars of developmental finance and a symbol of our commitment to inclusive economic growth.
He stated that the bank is an institution with deep historical significance and an essential role in supporting entrepreneurs, small businesses, and communities that are often underserved by the mainstream financial sector.
Finance MEC Francois Rodgers said that besides being declared insolvent, Ithala had R1 billion in cash, R1.9 billion in its loan book, and R3.5 billion in assets.
The decades-old financial institution’s problems started in 2022 when the Prudential Authority announced that it would not renew its annual exemption, which allowed it to operate like a commercial bank without a banking licence.
The exemption expired in 2023, and this meant the bank was operating without a licence. Funds were eventually frozen, and no one was allowed to withdraw or deposit money.
willem.phungula@inl.co.za