Liquidation of Ithala Bank 'premature' - KZN Legislature
Updated | By Gcinokuhle Malinga
The KZN Legislature's Economic Development
Portfolio Committee says the Prudential Authority's decision to pursue the
liquidation of Ithala is premature.

The South African Reserve Bank’s Prudential Authority on Thursday filed a court application in the Pietermaritzburg High Court for Ithala to be provisionally liquidated.
It cited the institution's failure to secure its banking licence and the need to protect the bank's 257 000 depositors.
Ithala was given an exemption to receive deposits while it regularised its operation.
The final exemption lapsed on 15 December 2023.
That same month, the regulator appointed a Repayment Administrator responsible for the repayment of deposits.
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The Administrator found that Ithala is technically and legally insolvent and exposing depositors to potential loss of their monies.
On Friday, the portfolio committee said the Prudential Authority had not fully considered the ongoing improvement plans and initiatives that Ithala has made so far to stabilise the state-owned entity’s operations.
The committee insists efforts have so far shown commitment to address its challenges.
It says it supports the provincial Economic Development Department and Ithala's plan to launch an urgent interdict.
"We believe that it’s insensitive over the fact that there are hundreds and thousands of our people in KwaZulu-Natal, particularly in rural areas, who cannot access financial institutions, and they only access them through Ithala," said committee chair, Mafika Mndebele.
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"On top of that, there are businesses that operate under Ithala. To take such a decision without considering other stakeholders, we think it’s recklessness on their part."
In a statement on Thursday night, Ithala said the RA ordered it to stop accepting deposits and processing withdrawals, despite the bank's assurances of financial stability and backing from Parliament’s Standing Committee on Finance and the KZN Government.
The entity has called the action irresponsible and says it will file an urgent application to challenge the order.
Similarly, it’s labelled the grounds of the Prudential Authority’s action flawed and frivolous.
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