Ithala clients must be spared trauma of liquidation - MPs
Members of Parliament want protection for Ithala Bank's clients, calling for the state-owned entity to be saved from liquidation.
On Wednesday, the National Council of Provinces debated Ithala's role as legal proceedings on its future continue.
In January, the Prudential Authority filed a court application in Pietermaritzburg for Ithala to be provisionally liquidated, saying the institution had failed to secure its banking licence.
The financial regulator said the move was necessary to protect the entity's 257,000 depositors.
During the NCOP debate, the ANC's Mxolisi Kaunda described Ithala as an instrument for equal access to finance.
"The Prudential Authority and the Financial Sector Conduct Authority should prioritise out-of-court settlements on ongoing legal disputes.
"When you debate this matter, you should keep in mind that it is the rural dwellers, old and young, and many organisations that utilise Ithala for financial services."
The IFP's Poobalan Govender says the bank's clients should not made to live with the trauma of the VBS Bank collapse.
"Thousands of pensioners were invested in the VBS bank thinking that what little they had would remain secure to see them through years," said Govender.
"Unfortunately, the scandal around VBS robbed them of their hard-earned investments. We cannot afford to see such trauma being visited upon more pensioners.
“As the IFP, we have the view that we have the opportunity to make Ithala Bank a beacon of South Africa's capability."
