The saga of VBS Mutual Bank has lasted for the better part of two years with VBS being placed under curatorship in early 2018 and placed into liquidation by the North Gauteng High Court in Pretoria later that year.
Municipalities suffered millions in losses when VBS Mutual Bank was placed under curatorship after they deposited a combined amount of R1.5 billion of public funds into the ill-fated bank.
Municipalities that deposited their money with VBS will not be covered following the bankruptcy and plunder by its own heads and politicians, dubbed the “great bank heist” by the Lesetja Kganyago-led Reserve Bank.
A Reserve Bank statement released on Friday said following a “fruitful” meeting with Chief Matsila and leaders of the shareholders’ forum, parties agreed that any interest in banking activities similar to those offered by VBS would be considered as a new banking licence application.
“The SARB again emphasised that VBS was in the process of being liquidated and that reinstating the banking licence was not an option. The SARB also clarified the process and criteria for applying for a new banking licence,” the statement said.
Investment holdings company Africapacity’s chief investment officer Enoch Ratlabala, who represented a group of shareholders that hoped to save the bank, said shareholders he represented were not offered the debt book, which made it difficult to make progress is saving VBS from liquidation.
“If the Reserve Bank says they must apply for a new license, it would be the decision of the shareholders’ forum. The law is clear that if it can be saved, the process must be allowed. But if the liquidators do not offer you the debt book, there is not much that can be done,” said Ratlabala.
The Thursday meeting between the Reserve Bank and shareholders was in keeping with a pledge from former minister of finance Nhlanhla Nene when he told Parliament in 2018 that any government guarantee to facilitate payment to VBS Mutual Bank would apply to deposits from ordinary clients and not to municipalities and companies.
Last week, the Reserve Banks said while it received a number of letters from parties seeking to have VBS Mutual Bank revived, it has said that the licence for the bank, which is currently in a liquidation process, cannot be bought.
VBS Mutual Bank liquidator Anoosh Rooplal said in November of 2019 that the Reserve Bank and the Public Investment Corporation and a few municipalities’ claims against the bank also accepted, amongst other corporate depositors, pending the sale of assets.