VBS Bank, which famously gave former President Jacob Zuma a R7.8-million loan to pay back the Nkandla money, has been placed under curatorship by the South African Reserve Bank (SARB). But Reserve Bank governor Lesetja Kganyago said on Sunday this was not an attack on black-owned banks.
Fin24 reported that the bank has been placed under curatorship due to the "severity" of its liquidity crisis. Kganyago reportedly said that auditing firm SizweNtshabulaGobodo has been appointed curator of the bank, while its planned listing on the JSE has been placed on hold.
The bank was accused of undermining black-owned banks – something Kganyago rejected on Sunday. He reportedly said the Reserve Bank oversees all banks regardless of who owns them.
"The colour of money is red, it is green, yellow, it's blue. If you apply for a banking licence and you are taking deposits you will be supervised in terms of the Bank's Act, irrespective of who owns you," he said. "The notion that the Reserve Bank decided to attack a black bank has to be condemned."
According to Fin24, deputy governor Kuben Naidoo said the decision to place VBS under curatorship was taken on February 16 when the bank failed to honour an obligation of the National Payments System.
"The Reserve Bank had discussions with the bank's management and board as well as its biggest shareholders; the Public Investment Corporation and Vele Investments; to develop a rescue plan. After an exhaustive process of engaging with the board, management and shareholders, there was no other solution besides curatorship," he reportedly said.
According to Business Day, VBS repeatedly ignored warnings that it was at risk because of its dependence on unlawful municipal deposits.
The bank reportedly continued to take deposits from municipalities even after Treasury warned six municipalities in August that it was illegal for them to bank with mutual banks. Mutual banks have licences more limited than commercial banks with full licences.
Some municipalities pulled their money from VBS after Treasury's warnings, and by mid-February, VBS had run out of cash, Business Day reported.
Pillay added that 18 months ago, there was a "significant" increase in municipal deposits at VBS. But when municipalities wanted their money, the bank could not pay, according to MoneyWeb.
He reportedly added that small depositors with less than R50,000 should be able to access their money, and that it is now likely that all depositors of VBS will not be able to access their money immediately.