Your Money Is Safe, Govt Tells Ithala Depositors Amid Liquidation Bid

The National Treasury has assured South Africans who have deposited money at Ithala SOC Ltd, which is often referred to as a bank, that their money is safe.

On Thursday 16 January, the Prudential Authority PA announced that it had applied for Ithalas provisional liquidation at the Pietermaritzburg high court.

This has sparked panic among depositors that they could lose their funds. However, Treasury said on Thursday that Ithala deposits will be protected by a government guarantee, subject to the conclusion of the necessary technical work.

This work includes providing a government guarantee to one or more banking institutions to ensure the accounts of depositors can be migrated timeously and funds can be made available, it added in a media statement .

We are working closely with the Prudential Authority to ensure an orderly process that protects depositors interests.

While depositors will need to urgently make alternative banking arrangements, they can be assured that we will endeavour to secure their funds as far as is possible.

Although Ithala is often referred to as a bank, it does not have a banking licence. Instead, the finance minister granted it an exemption under the Banks Act to receive deposits as it sought to obtain a banking licence.

In its media release , the PA claimed that Ithala had failed to obtain a licence by the time a final exemption notice lapsed in December 2023.

The SA Reserve Bank subsequently appointed a Repayment Administrator RA, who has established that Ithala is technically and legally insolvent, exposing depositors to potential loss of their deposits or parts thereof, the Authority said.

Moreover, Ithala did not provide sufficient capital commitments or secure a legally binding renewal of the guarantee over its deposits from its shareholder, the Provincial Government of KwaZulu-Natal.