Latest news with #Ithala
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!
IOL News
16-05-2025
- Business
- IOL News
KZN Premier Thami Ntuli calls for backing of Ithala SOC Limited amid banking uncertainties
KZN Premier Thami Ntuli defends Ithala's solvency, despite Treasury's pending R2 billion guarantee and legal uncertainties surrounding its status. Image: Independent Newspapers Archives KwaZulu-Natal Premier Thami Ntuli has called on provincial departments, municipalities, political parties, and businesses to demonstrate their support for Ithala SOC Limited by banking with the institution, but only once it obtains a full banking license. In an interview on Face the Nation, Ntuli clarified recent remarks he made encouraging public entities to transact with Ithala. He stressed that this support must only materialise "when it is fully registered" as a bank under the Banks Act, in line with Section 7.3 of the Municipal Finance Management Act (MFMA), which prohibits municipalities from banking with unregistered institutions. The Premier's remarks come after the Pietermaritzburg High Court ruled that Ithala can continue operations while the Prudential Authority's application to liquidate it is underway. The ruling was seen as a reprieve for the institution, which has long operated under a ministerial exemption rather than a full banking license. Ntuli said the province is committed to ensuring Ithala becomes fully compliant, but he also believes the institution has been unfairly targeted. 'Unfortunately, the pass of a new act compelled that the issue of any bank has to, in fact, meet some compliant areas of which Ithala has met most of them,' he said. He also addressed public concern over the safety of deposits in Ithala, stating, 'We are giving assurance that the people's money is safe and they will get their money from Ithala. It has an excess of cash of more than R300 million.' Yet, questions remain about why the bank still requires a guarantee from National Treasury if it is indeed solvent. When asked, Ntuli acknowledged the complexity: 'It is too technical, maybe even for me,when you talk about the guarantee, you talk about something which is much more technical on the side of other aspects of the bank.' 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 ✕ National Treasury had earlier indicated it was working on a R2 billion guarantee for Ithala's depositors, contingent on a technical process that has yet to be finalised. Ntuli confirmed the KZN government had engaged Treasury on the guarantee: 'We engaged the Treasury so that we, in fact, appealed for the guarantee and we were in agreement, but we've seen a letter suggesting otherwise.' He emphasised Ithala's importance to the provincial economy.'This bank has 38 branches which are in rural communities and township communities, when we fail to preserve it, that will mean the people who are living in rural communities and in township, might be deprived of an opportunity of seeing their economy also growing.' Get your news on the go, click here to join the IOL News WhatsApp channel. IOL Politics
IOL News
14-05-2025
- Business
- IOL News
Understanding the Banks Act exemption: MEC Zondi's insights on Ithala
KwaZulu-Natal Economic Development, Tourism and Environmental Affairs (Edtea) MEC Reverend Musa Zondi. Image: Sibonelo Ngcobo/ Independent Newspapers KwaZulu-Natal Economic Development, Tourism and Environmental Affairs (Edtea) MEC Reverend Musa Zondi has discussed issues surrounding the Banks Act exemption and the banking licence and how these affect Ithala SOC Limited. Zondi discussed the two topics during a media briefing called by the KZN government, led by Premier Thamsanqa Ntuli. Ithala SOC Limited CEO Dr Thulani Vilakazi was also present. Zondi explained that there is a provision in the Banks Act for an exemption to be granted to certain institutions, such as Ithala SOC, to operate as a fully-fledged bank without having to acquire a banking licence. 'That has been the case from day one until the powers that be decided that they were no longer going to grant it,' Zondi said. 'Denying extending the exemption to Ithala SOC may as well cause an amendment to the Banks Act to do away with the exemption regime.' Zondi said they are making Ithala operational because they are working within the law governing the banks in South Africa. 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 ✕ He said he has been a parliamentarian since 1994, and from 1994, there has been a persistent call from parliamentarians that a state bank should be established. 'There has been no success to date. Ithala is the only, if you like, existing state bank which has been successful,' Zondi said. 'So why kill something that is already successful?' On Ithala's acquisition of a banking licence, Zondi explained that the reason they needed to acquire a banking licence is to comply with the current situation where the Prudential Authority has withdrawn the bank's ability to operate. 'As parliamentarians, when we drafted that Act we drafted it with state institutions like the land bank and others (in mind), will they need a commercial licence, do you need to privatise them. No, you don't need to privatise them and therefore that exemption clause was put in there,' Zondi said.
IOL News
13-05-2025
- Business
- IOL News
Prudential Authority appeals ruling allowing Ithala bank to resume operations
The Prudential Authority (PA) has announced that it has launched an application for leave to appeal the 9 May 2025 ruling by the Pietermaritzburg High Court Image: File The Prudential Authority (PA) has launched an application for leave to appeal the May 9, 2025 ruling by the Pietermaritzburg High Court regarding Ithala SOC Limited (Ithala). Judge Muzi Ncube's ruling last week allowed the embattled state-owned bank to resume operations, while also stating that Johannes Kruger, the Repayment Administrator appointed by the Prudential Authority (PA), had no legal right to assume control of the bank's daily operations. KwaZulu-Natal Premier Thami Ntuli welcomed the High Court's decision, noting that the ruling would bring relief to the thousands of clients, employees, and suppliers who have been unable to receive payments due to the current Administrator's halt on all transactions. "We urge the public to stand in solidarity with us as we fight to preserve an institution that represents economic dignity, inclusion, and empowerment for millions," Ntuli said. In a statement released on Monday, the Prudential Authority confirmed it had filed for leave to appeal the ruling, and the Repayment Administrator also intends to challenge the judgment. "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 SOC Limited's (Ithala) 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 statement read. The Prudential Authority further clarified that this judgment is separate from the ongoing liquidation application, which is still pending before the same court. The PA is awaiting the finalisation of the liquidation application. "The PA's primary mandate is to protect 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." [email protected] IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel.
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
