VBS Mutual Bank Curatorship
Following liquidity problems, VBS Bank was placed under curatorship on 11 March 2018 in terms of the South African Banks Act, Act 94 of 1990, by the South African Reserve Bank (SARB). A report released by the SARB in October found evidence of wide-scale looting, fraud and corruption, and recommended that bank leadership, public officials and auditors be criminally charged and held liable in civil proceedings.
The report found that R1,894,923,674 (US$ 130 million) was transferred from the Bank to fifty three individuals between 15 March 2015 and 17 June 2018. According to the report, R16,148,569 (US$1.09 million) of that money went to Brian Shivambu, younger brother of the Economic Freedom Fighter senior politician Floyd Shivambu. The report also implicated the African National Congress’s deputy chairperson for Limpopo, Florence Radzilani, and treasurer, Danny Msiza
VBS MUTUAL BANK PLACED UNDER CURATORSHIP
JOHANNESBURG – South African Reserve Bank (Sarb) Governor Lesetja Kganyago has announced that VBS Mutual Bank has been placed under curatorship with immediate effect.
The governor made the announcement on Sunday afternoon in Pretoria.
Kganyago says it was granted a mutual bank licence in October 2000.
“VBS experienced increasing liquidity challenges over the last 18 months. These problems emanated from a failure of the board of directors and executive management to manage the bank’s rapid growth and its funding and liquidity position.”
He says this resulted in VBS being placed under intense regulatory scrutiny.
“The liquidity challenges emanated from the maturity of a large concentration of deposits from municipalities and was exacerbated by the termination of other sizable deposits and the inability to source sufficient funding timeously.”
He says it was highly risky for the bank to take sizable municipal deposits that were short term and lend them out long term.
“The minister of finance, upon the recommendation from the Registrar of Banks, has decided to put VBS Mutual Bank under curatorship with effect from 5 pm on Sunday, 11 March 2018.”
Kganyago says retail deposits amounting to R50,000 per depositor are guaranteed.
He says the appointment of a curator is in the best interest of the public and VBS depositors.
“The whole idea in putting banks under curatorship is because you believe that maybe it might just be salvageable.”
Kganyago rubbished rumors that the bank is being punished because it is black owned, saying all banks are equally monitored.
He says clients should not panic and assures that the curator will ensure that all loans due are collected.
The bank is expected to operate as normal on Monday.
VBS came under the spotlight earlier in 2017 when it gave former president Jacob Zuma a R7.8 million loan to pay off his Nkandla debt.