South Africa's banking sector is frequently celebrated as one of the strongest and most successful in the country, earning international acclaim for its robustness. However, the industry has not been immune to notable failures over the years.

Despite its strong reputation, South African banks have faced significant risks, leading to the closure of several institutions in the past three decades. Since 1990, 14 banks in the country have been placed under curatorship, with two undergoing this process twice.

One of the most high-profile cases was African Bank, which entered curatorship in 2014 due to liquidity issues stemming from unsecured lending. The bank was subsequently split into a "bad bank," which absorbed its worst loans and associated liabilities, and a "good bank," which received a R10 billion rescue package from the South African Reserve Bank (SARB), the Government Employees Pension Fund (GEPF), and a consortium of other banks. While this intervention stabilized the banking system, shareholders suffered significant losses. The SARB reported a R982 million impairment loss related to its investment in African Bank.

African Bank, now rebranded as Africanbank, is slated to list on the Johannesburg Stock Exchange in 2025, necessitating the SARB to divest its holdings. The bank has also acquired Grindrod Bank and is awaiting regulatory approval to purchase Sasfin’s Capital Equipment Finance and Commercial Property Finance businesses for R3.26 billion.

In contrast, VBS Mutual Bank is unlikely to recover, as it is currently undergoing liquidation. The bank's former chairman, Tshifiwa Matodzi, has pleaded guilty to 33 counts of corruption related to the theft of R2 billion from depositors. As part of his plea deal, Matodzi is cooperating with authorities to expose a broader network of corruption, potentially implicating senior political figures.

More recently, the local unit of Pakistan-based Habib Overseas Bank was placed under curatorship for violating financial regulations. To protect depositors, the SARB will provide qualifying depositors with R100,000.

To safeguard customers from similar incidents in the future, the SARB has introduced the Corporation for Deposit Insurance (CODI). This Deposit Insurance Scheme (DIS) offers protection to qualifying depositors, guaranteeing access to up to R100,000 of their deposits in the event of a bank failure. This coverage applies to depositors of all types of banks, including commercial, cooperative, mutual, and foreign institutions, ensuring that South Africa aligns with other G20 countries in offering such protections.