Economist at Econometrix, Sam Rolland says VBS's biggest crime was to accept short-term deposits from municipalities under the municipal finance management act. According to Rolland, municipalities are not allowed to place deposits in mutual banks.
The difficulty with this is a lot of VBS balance sheets relied on deposits from municipalities, so cutting that, really was cutting a big lifeline of the business.— Sam Rolland, Economist at Econometrix
This comes after South African Reserve Bank Governor, Letja Kganyago's announcement on 11 March that the bank is put under curatorship with immediate effect.
Listen to Sam Roland explaining why VBS has to be investigated further: