<\/p>\n
FORMER finance minister Des van Rooyen has called on the Parliament to fix an anomaly in government policies that prevented Ithala Bank from receiving a banking licence.<\/p>\n
Van Rooyen, who is now Umkhonto weSizwe Party MP, and KwaZulu-Natal party convenor Willies Mchunu held a media briefing on Friday to outline the party\u2019s strategy of defending the provincial government\u2019s state-owned bank from the Prudential Authority (PA)\u2019s move to provisionally liquidate it.<\/p>\n
The PA\u2019s liquidation matter had yet to be heard at the Pietermaritzburg High Court. Various parties and the provincial government have indicated that they would oppose the application. <\/p>\n
Since it was established by the now defunct Zulu government under late IFP leader Prince Mangosuthu Buthelezi in 1958, Ithala never had a banking licence, but it was collecting deposits and operated like a bank through being exempted by the Finance Ministry.<\/p>\n
MKP\u2019s campaign to save Ithala would be an addition to others that have been announced by various concerned groups, including Zulu King Misuzulu.<\/p>\n
The democratic dispensation Parliament came up with the Financial Matters Amendment Act, which prevented provincial and municipality financial entities from being registered as banks, something, Van Rooyen described as a travesty of justice and defeat to transforming financial institutions for the benefit of the economically marginalised black people.<\/p>\n
Van Rooyen said the Fifth Parliament identified an anomaly in the Act, and recommended that the Sixth Parliament correct it.<\/p>\n
\u201cIt cannot be correct that when we are a developmental state, we don\u2019t promote access to financial services at a local level where it matters most.<\/p>\n
\u201cHow do we deny municipalities or capable metros to initiate banking services if we are in the business of promoting access to financial services?\u201d he asked.<\/p>\n
He said since it was started by \u201cour elders\u201d decades ago, Ithala has been proven to be a success in the province, which has vast rural areas with no alternative banking services.<\/p>\n
\u201cIthala has developed residential settlements and businesses in areas where commercial banks are unable to support our people.<\/p>\n
\u201cIthala has been the model of funding houses in a communal land,\u201d he said.<\/p>\n
He added that it was wrong for Parliament to, instead of supporting Ithala, bring legislation that impaired it from being supported by the government.<\/p>\n
\u201cThe Sixth Parliament failed to execute on this mandate,\u201d he said.<\/p>\n
He said the Standing Committee on Finance of the Seventh Parliament was currently working on reviewing the problematic Act.<\/p>\n
According to him, Ithala needed to be supported to deal with challenges as the commercial banks enjoyed support from the apartheid government.<\/p>\n
\u201cAs a Parliament, we have embarked on a process of introducing amendments to the current Act,\u201d he said.<\/p>\n
Ithala is currently facing mountains of challenges, which led to its Final Exemption Notice lapsing on December 15, 2023.<\/p>\n
The effectiveness of Ithala\u2019s boards\u2019 compliance with the exemption notice and applicable legislation and its failure to comply with banking practices was another issue that concerned the PA.<\/p>\n
Others were: prolonged vacancies; challenges in attracting experienced and skilled banking executives; and challenges in establishing a succession planning framework, which \u201chas contributed to the complexities faced by Ithala\u201d.<\/p>\n
The PA also investigated the bank for awarding a contract worth R34.7 million to a company, Tech Mahindra, to install a new information technology system, but when this did not happen, the bank was accused of maladministration. The tender was declared wasteful expenditure in 2020.<\/p>\n
PA also found that the bank had between March 31, 2008, and March 31, 2024, lost R520 million.<\/p>\n
Van Rooyen said the challenges facing Ithala were not unique to those of other banks.<\/p>\n
\u201cThe challenges of the well-established institutions are well-publicised as we know that some of them were found guilty of manipulation of currency and the list is endless,\u201d he said.<\/p>\n
He said the demise of Ithala would violate the right of rural communities in the province to get banking services.<\/p>\n
Outlining the party\u2019s plan of action, he said MKP would soon mobilise masses to participate in \u201cmassive marches across all provinces targeting the SARB\u201d. <\/p>\n
He said other provinces would be encouraged to picket. <\/p>\n
The party would also launch a vigorous social media campaign \u201cto expose the injustices surrounding Ithala\u201d to rally support from civil society, professionals, and ordinary South Africans \u201cwho believe in economic justice\u201d.<\/p>\n
\u201cThrough robust engagement with stakeholders, we will engage with trade unions, civil society organisations, and other political formations to build a broad coalition in defence of Ithala.<\/p>\n
\u201cWhere necessary, we will explore legal avenues to challenge the decisions made by the SARB and to protect the rights of Ithala\u2019s depositors and employees.\u201d<\/p>\n
The party would also lodge a formal complaint against the bank\u2019s repayment administrator, Johannes Kruger, for allegedly sharing confidential client information with First National Bank.<\/p>\n
\u201cAn illegal act which undermines the trust and integrity of our financial institutions and must be thoroughly investigated,\u201d he said.<\/p>\n
bongani.hans@inl.co.za<\/p>\n<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
FORMER finance minister Des van Rooyen has called on the Parliament to fix an anomaly in government policies that prevented Ithala Bank from receiving a banking licence. Van Rooyen, who is now Umkhonto weSizwe Party MP, and KwaZulu-Natal party convenor Willies Mchunu held a media briefing on Friday to outline the party\u2019s strategy of defending […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[2745,1606,14483,636,14262,16292,5468],"class_list":["post-232020","post","type-post","status-publish","format-standard","category-politics","tag-bank","tag-campaign","tag-ithala","tag-launches","tag-liquidation","tag-mkp","tag-save"],"yoast_head":"\n