The South African Reserve Bank is denying claims it targeted VBS Mutual Bank because it is black-owned, saying all banks are subject to the regulations of the Banks Act.
EFF leader Julius Malema called for a march outside SARB offices accusing the Reserve Bank of victimising VBS because of a multi-million rand loan it gave to former president Jacob Zuma.
Deputy Governor at the South African Reserve Bank, Kuben Naidoo says curatorship is one step before liquidation, where there may be hope of saving the business.
This will require us to intervene, to take over the board and management responsibilities through a curator to stabilise liquidity positions and devise a plan to pay back the depositors.— Kuben Naidoo, Deputy Governor at the South African Reserve Bank
If the curator actually finds that the bank is insolvent, then you may actually lose the bank. At this stage the plan is to attempt to save the bank.— Kuben Naidoo, Deputy Governor at the South African Reserve Bank
Naidoo denied claims that SARB only started raising issues around compliance with the bank when black members took over the board.
It is absolutely untrue. We raised compliance issues around the deposit about 18 months ago, long after black management was in place.— Kuben Naidoo, Deputy Governor at the South African Reserve Bank
Naidoo says VBS behaved recklessly by taking deposits from municipalities.
He says the bank was warned against taking large deposits from municipalities to avoid a situation where they would be unable to honor a withdrawal.
As a regulator we have to go out of our way to ensure we can support black business and the transformation of the financial sector. But what we cannot do is to look the other way when the law is broken, because our job is also to protect the depositors.— Kuben Naidoo, Deputy Governor at the South African Reserve Bank
To hear the rest of the interview with Kuben Naidoo, listen below:
This article first appeared on CapeTalk : SARB denies VBS curatorship was down to bank being black-owned