Customers of Ithala SOC Limited are fearful of the possible impact the problems faced by the bank could have on their lives after a court ordered that it stop taking deposits.
Customers, who spoke to “The Mercury” on Thursday,, said they have not received any official communication from the institution on the challenges it is facing.
In terms of a court order, granted by the Gauteng High Court, Pretoria, in December, Ithala is not entitled to continue any deposit-taking activities and to deal with any deposits already received other than under the direction of a repayment administrator appointed by the South African Reserve Bank Prudential Authority.
Johan Kruger has been appointed as the repayment administrator and is empowered to recover and take possession of all deposits taken by Ithala from depositors or under its control in terms of the Banks Act.
Attempts to reach Kruger were unsuccessful on Thursday. Xolani Jele from Ingwavuma, a rural area in Jozini Municipality in northern KwaZulu-Natal, said Ithala was his primary bank and the next available bank was 80km away.
Jele said he became aware of the bank’s challenges through media reports.
He said the bank had many customers in rural areas.
“I live in the Ingwavuma, Ithala is the only bank that we have there. If anything happens to it, it will mean we now have to travel 80km to Jozini to find another bank. I have been with the bank for 11 years, they’re the only people I have banked with, my salary is deposited there, my home financing is there,” he added.
He said since last year he had noticed that they had technical challenges when trying to use an Absa ATM. “(An ATM notice) would just say ‘consult your branch’.”
KZN MEC for Economic Development Siboniso Duma said this week that a contract that Ithala had with Absa bank to use Absa infrastructure for banking activities had expired.
Jabulani Myaka, from the Nkandla area, said he heard only on Thursday that the bank might have challenges.
“I use the bank for business transactions, if anything were to happen to it it would create a lot of difficulty. It has cheaper rates compared to other banks, if the business account has no money, it’s not closed as it happens with other banks.”
A member of a family savings club, which banks with Ithala, who spoke on condition of anonymity, said it was very concerning that the bank has chosen to keep quiet about the matter.
“I have not heard about the challenges. I am concerned about this issue, we have no idea whether the bank will be able to repay all the depositors or are they going to keep a portion of it and we have no idea what the bank charges will be,” he said.
In a statement, IFP chairperson Thami Ntuli raised concern about the negative developments affecting the bank saying the party feared that it could mean its impending closure.
He said Ithala has grappled for years to obtain a banking licence, with the South African Reserve Bank outlining specific requirements for its issuance.
“Unfortunately, due to a lack of political will from the government, the bank did not receive the necessary support to meet these requirements and obtain the licence,” Ntuli said.
In a statement in response, the KZN Economic Development, Tourism and Environmental Affairs department accused Ntuli of disinformation.
“Ithala SOC Limited is fully functioning and there are no plans to close down this important institution as it was alleged by Ntuli.
“We are comforted by calls from millions of Ithala’s loyal customers most of whom are from rural areas and townships.
They continue to show resilience and are navigating through these challenges with determination,” said the statement.
The Mercury