The provincial government is questioning the timing of the liquidation litigation.
The KwaZulu-Natal government says it will use all possible avenues to challenge the Prudential Authority’s application to liquidateThis was after the repayment administrator, appointed by the Reserve Bank, found that Ithala was technically and legally insolvent, which exposed the more than 200 000 depositors to the potential loss of their deposits.
Ithala, which is often referred to as a bank, was never granted a banking license. Instead it operated under a special exemption, granted by the Ministry of Finance, which expired in 2023. The authority explains that a Final Exemption Notice was granted to Ithala to afford it a final opportunity to regularise its deposit-taking activities and to register as a bank.
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KZN Treasury at loggerheads with Sarb over IthalaThe MEC for finance says the province is determined to ensure Ithala’s survival.
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IFP Vows to Defend Ithala Bank Against LiquidationThe Inkatha Freedom Party (IFP) has pledged to defend Ithala Bank from liquidation, calling the Prudential Authority's decision 'ill-advised' and a 'travesty of justice'. IFP leader Velenkosini Hlabisa and KwaZulu-Natal chairperson Thamsanqa Ntuli vowed to fight for the bank, which they see as crucial to the black economy. They plan to support the KwaZulu-Natal government in court against the Prudential Authority and criticize the perceived effort to consolidate major banks at the expense of black-owned institutions.
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KwaZulu-Natal Government Seeks Ramaphosa's Intervention to Save Ithala Bank from LiquidationThe KwaZulu-Natal government has appealed to President Cyril Ramaphosa for intervention to prevent the liquidation of Ithala Bank. The South African Reserve Bank's Prudential Authority had sought the bank's provisional liquidation due to its alleged insolvency. The provincial government and Ithala Bank filed an urgent application to counter this process, but the hearing was postponed due to the presiding judge's unavailability. Consequently, the government has escalated the matter to President Ramaphosa, emphasizing the potential impact of the bank's closure on 250,000 clients.
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Ithala Bank Faces Closure Amidst Political OutcrySouth Africa's only state-owned bank, Ithala Bank, is facing potential liquidation following an application by the South African Reserve Bank (SARB). The move has sparked widespread condemnation from political parties who argue that Ithala plays a vital role in supporting financially marginalized black communities. They insist the bank's closure would be detrimental to black economic empowerment and accuse the SARB of acting recklessly.
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