The government has moved to reassure retail depositors of Ithala Bank that their funds remain secure as the state-owned financial institution undergoes liquidation.
The Reserve Bank’s Prudential Authority has filed an application in the Pietermaritzburg High Court for the provisional liquidation of Ithala, citing financial instability. An administrator appointed by the Reserve Bank determined that the institution is both technically and legally insolvent, placing depositors at risk.
Despite the bank’s collapse, Ithala has stated that the move is in the best interests of its approximately 257,000 depositors. Meanwhile, the National Treasury has confirmed that efforts are underway to transition affected clients to another financial institution.
In an official statement, Treasury emphasized that both the government and the Reserve Bank are working closely to ensure a smooth and structured process that safeguards depositors’ interests.
As the liquidation process unfolds, affected clients are advised to stay informed through official banking and government channels for updates regarding the migration of their funds and accounts.