Senior management of Ithala Bank has called for calm following the decision by the Financial Sector Conduct Authority (FSCA) to suspend its license to trade as a financial service provider. This means that the institution will no longer offer insurance policies to new clients until the matter has been resolved.
The bank says existing clients will not be affected by this decision. This came out during a media briefing held in Durban by KwaZulu-Natal MEC for Economic Development Musa Zondi and the management of Ithala.
Ithala was established in the late 1950s to help the government promote economic development and empowerment. The institution offers various financial services such as business finance and banking.
For the past several years, the institution was exempted by the FSCA from meeting certain financial requirements in order to fully operate as a banking institution. The exemption has since expired.
"We are in a terrain where we are holding bank deposits but we are no longer having the instrument that gives us cover to operate and mimic a bank and thats the main reason that today we are sitting here because that equation which all banks enjoy for them to be exempted, we cannot enjoy it because we do not hold the initial exemption that we had," says Dr Thulani Vilakazi from Ithala Bank.
