The saga surrounding Ithala SOC Limited, a black-owned bank pivotal to the financial wellbeing of many in KwaZulu-Natal, and First National Bank (FNB) has been highlighted during the Portfolio Committee on Trade, Industry and Competition, and the Standing Committee on Finance meeting in Parliament on Tuesday.
According to Daily News, the Prudential Authority (PA) initiated the bank’s liquidation in the Pietermaritzburg High Court.
Approximately 65,000 social grant recipients who received payments via Ithala Bank were urged to visit FNB to open new bank accounts between January 28 and February 4, to enable them access to their funds during the next payment run, using their IDs.
Premier Thamsanqa Ntuli previously held a media briefing in Durban, accompanied by MEC for Economic Development, Tourism and Environment Affairs, Reverend Musa Zondi, expressing firm resolve to not only challenge the allegations levied against Ithala but also to preserve a crucial banking institution that serves marginalised communities across the province, Daily News reported.
It said the looming liquidation stems from claims by the PA of alleged insolvency and non-compliance, yet Ntuli has questioned the motives behind these actions.
On Tueday, Member of the uMkhonto weSizwe Party (MKP), Des Van Rooyen, in attendance at the joint meeting, posed questions during the sitting.
He said the party heard complaints from its constituents on banking issues and possible collusion between the Banking Association of South Africa (BASA) and banks.
He also highlighted the Ithala matter, stating the assassination of the black-owned institution reeked of desperation and politics. Van Rooyen further wanted to know why the regulatory bodies were ‘snubbing’ the parliamentary process as indicated by the treasury.
“It has been brought to our attention by our constituents that out of desperation the Ithala database has been handed over to FNB. As we speak now, Ithala clients are being harassed, urging them to join FNB. I am concerned because of the POPIA Act provisions. Are the prudential authorities aware of this particular practice?” he questioned.
“Who transferred the Ithala clients to FNB? What is clear is that this is more of a political process where people are desperate and expeditiously wanting to take over the clientele of Ithala. Collapsing Ithala.”
IOL