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.
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