Godongwana places Habib Overseas Bank under curatorship

This follows a recommendation from the South African Reserve Bank's Prudential Authority (PA).

The Authority identified weaknesses in the bank’s governance process, its internal control environment, investigations and reviews which have repeatedly confirmed the bank’s non-compliance with a number of financial sector regulations.

This non-compliance also relates to significant findings relating to breaches of exchange control regulations.

In a statement the central bank says the move is being done to proactively protect the bank’s depositors.

"Upon the appointment of a curator, the Board and management of Habib Overseas Bank have been relieved of all their powers, which are now vested with the curator, subject to the supervision of the PA. 

"Any other person vested with the management of the affairs of the bank shall be divested thereof. The curatorship provides the legal framework within which the necessary initiatives can take place to enable an orderly resolution."

However, the bank will continue to operate during the period of curatorship, subject to the assessment of the curator. 

"The curator will assume the powers of the Board and management and will make decisions regarding the bank’s continued granting of loans and sound banking activities generally.

"The curator is also required to recover and take possession of all the assets of Habib Overseas Bank. it remains liquid, with a liquidity coverage ratio above the regulatory requirement, and there are no immediate concerns for depositors, which means their funds remain safe at the bank. The curator will keep customers informed of any significant new developments at the bank," statement read.

Gondongwana has since appointed PricewaterhouseCoopers Inc. (PwC) as the curator, with Mr Craig du Plessis as the representative of PwC who will be responsible for Habib Overseas Bank with immediate effect.

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