VBS Mutual Bank

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SA central bank says has secured guarantee for VBS depositors

JOHANNESBURG, July 5 –  South Africa’s central bank said it had secured a guarantee from the National Treasury for retail depositors with failed for VBS Mutual Bank for up to R100,000 per depositor.

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The South African Reserve Bank (SARB) said it would announce the details on the repayment of retail deposits on July 9. Retail depositors refers to individuals, funeral schemes, burial societies, savings clubs and stokvels.

The SARB placed VBS under curatorship in March and its annual financial statements were found to be inaccurate. The SARB said the possibility of fake deposits had since been uncovered and a forensic probe was underway to check whether any fraud was committed. It said at the time all retail deposits up to the amount of R50,000 per depositor would be guaranteed.

“With concurrence of the minister of finance, the guarantee has been increased to R100,000 per retail depositor, in line with the proposals in the discussion paper on the deposit insurance scheme published in May,” the central bank said late on Wednesday.

“The curator will continue to collect on loans due to VBS Mutual Bank. Individuals and entities with loans at VBS Mutual Bank are expected to continue to make payments on these loans.”

Some 14 municipalities from the North West, Limpopo and Gauteng provinces have owned up to depositing about R1.5 billion in total into VBS as part of a short-term investment.

The department of cooperative governance and traditional affairs has urged them to work on recovery plans to augment possible service delivery disruptions due to budget shortfalls as a result of the loss of investment.” (ANA)

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