ANC in KZN vows to protest Ithala Bank liquidation

The Prudential Authority applied for liquidation at the Pietermaritzburg High Court following a determination by Johannes Kruger, a repayment administrator appointed by the PA, who said the bank was legally and technically insolvent.  

According to the Prudential Authority, this puts the depositors’ money at great risk of being lost. 

However, National Treasury has reassured depositors that their deposits are protected by a government guarantee.  

The alliance has condemned the move to liquidate the bank, arguing that it is vital in supporting marginalised communities, small businesses, and rural economies.

Briefing the media on Wednesday, ANC KZN Provincial Secretary Bheki Mtolo said Ithala Bank has been a lifeline for marginalised communities, particularly rural women and single mothers.  

"Ithala has always remained the hope of the marginalised, giving them access to finance and ordinary banking. This is why the KZN government has positioned Ithala as a financial development institution that promotes growth and provides funding for SMMEs and vulnerable members of society," Mtolo said.  

He highlighted the critical role Ithala has played in supporting small, medium, and micro enterprises and fostering economic opportunities in the province.  

"Alliance Secretariat has agreed to reposition this province as a leading and powerful player in driving economic growth and development in South Africa. Strengthening Ithala is central to igniting an entrepreneurship revolution, especially in rural and township economies," he added.

The Prudential Authority’s decision to liquidate the bank, based on legal and technical insolvency claims, has sparked outrage in the alliance. 

Mtolo accused repayment administrator Johannes Kruger of "gross human rights violations," saying that the liquidation would deprive 257,000 account holders and over 5 million dependents of access to their funds.  

"More than 400 Ithala workers will lose their jobs, and millions of indigent households will be pushed further into squalor. We won’t allow the repayment administrator to reverse the gains scored over decades of Ithala’s existence," Mtolo warned.

The alliance has vowed to continue grassroots-based mass action against the decision, which they labelled "unsound and unjustifiable”.

"The mass action will continue against the Repayment Administrator, the public enemy number one.

He is against thriving rural and township economies and the overall socio-economic development of indigenous people.

"With this said, we wish to reiterate our firm opposition against any form of fraud and corruption within Ithala.

"Our view is that any form of corruption of financial mismanagement must be attended to separately by relevant crime-fighting agencies without collapsing this financial institution," said Mtolo.

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