NCOP members call for Ithala Bank to be saved from liquidation

CAPE TOWN - Members of the National Council of Provinces (NCOP) have called for Ithala Bank to be saved from liquidation.

They say the KwaZulu-Natal-based bank should not be allowed to be another VBS Bank and face collapse due to poor management, saying 5,000 jobs were at risk should the bank be closed.

Parties representing the provinces in the NCOP took part in a debate in Parliament calling for the "continued existence" of Ithala Bank.

Ithala Bank is currently facing liquidation, and according to the South African Reserve Bank’s Prudential Authority, the development bank is technically and legally insolvent.

But NCOP Deputy Chairperson, Les Govender, said government must do everything in its power to save the bank from becoming another VBS and protect the investments of its many clients.

"Unfortunately, the scandal around VBS robbed them of their hard-earned investments. We cannot afford to see such trauma being visited upon more pensioners and the staff of the Ithala Development Finance Corporation (IDFC)."

The African National Congress’s Mxolisi Kaunda said Ithala Bank was established to cater mainly to the rural poor.

"Since its formation, Ithala Bank has broken new ground in advancing real financial inclusion in KwaZulu-Natal, particularly for the poor."

Despite the calls by the MPs, the bank’s future will now depend on the Pietermaritzburg High Court, which has reserved judgment in the matter.