Business News 12.3.2018 02:06 pm

Black Business Council tries to intervene on behalf of VBS Mutual Bank

Picture: Twitter

Picture: Twitter

SARB Governor Lesetja Kganyago announced on Sunday afternoon that VBS Mutual Bank had been placed under curatorship with immediate effect.

The Black Business Council (BBC) said on Monday that it notes with serious concern events that culminated in the placing of the troubled VBS Mutual Bank (VBS) into curatorship by the South African Reserve Bank (SARB), and that it was engaging all relevant stakeholders to find an amicable solution.

Kganyago said that VBS experienced increasing liquidity challenges over the last 18 months emanating from a failure of the board of directors and executive management to manage the bank’s rapid growth and its funding and liquidity position.

This had resulted in VBS being placed under intense regulatory scrutiny.

BBC chief executive, Kganki Matabane, said that they were concerned about the details of the circumstances leading to this unfortunate curatorship of VBS Bank.

“BBC remains ‘deeply concerned’ because the SARB and National Treasury did not take the BBC into confidence on the matter affecting a black bank,” Matabane said.

“The BBC is currently engaging with all affected parties; National Treasury, VBS and the SARB in order to find possible amicable solutions for VBS.”

Kganyago said it was highly risky for the bank to take sizeable municipal deposits that were short-term and lend them out long-term. Kganyago dismissed rumours that the bank was being “punished” because it was black-owned, saying all banks were equally monitored.

Section 7 of the Municipal Finance Management Act (MFMA) stated that a municipality may not open a bank account with an institution not registered in terms of the Banks Act, and mutual banks, such as VBS, were not registered in terms of the Act.

The bank shot to prominence in 2016 when it lent former president Jacob Zuma R7.8 million to reimburse the state for the non-security upgrades made to his private homestead in Nkandla in KwaZulu-Natal.

 – African News Agency (ANA)

 

 

 

 

 

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