NEWS: Reserve Bank Moves to Liquidate Ithala SOC
Finance News
The SA Reserve Bank’s Prudential Authority has asked the Pietermaritzburg High Court to close down Ithala SOC (a state-owned financial institution based in KZN).
This decision was made after serious concerns were raised about the financial health of the bank, which is said to be insolvent. Ithala has till recently been operating under a special exemption that allowed it to take deposits without a full banking license.
National Treasury has promised to protect the money of the +-257,000 customers through a government guarantee while their accounts are moved to other banks (like ABSA).
The move has sparked criticism from political parties and unions, including the EFF, ActionSA, and NEHAWU. They argue that not enough support was given to help Ithala meet banking requirements. KZN provincial government is also fighting the decision and plans to challenge it in court.
If any Debt Counsellors’ clients have been impacted by the recent upheaval it is good to know that arrangements are now finally in place for debt repayments to be made to an ABSA account. This is being handled behind the scenes at the PDAs and Debt Counsellors can simply select the same CP as before on their systems. Any funds that may have been held back recently will now be released to that ABSA account.
