IFP in KZN Condemns Impending Closure of Ithala Bank

Feb 7, 2024 | Press Releases

The news concerning the impending closure of Ithala Bank, a historic financial institution in KwaZulu-Natal, delivers a severe blow to many black-owned businesses, individuals, and emerging enterprises.

The demise of the bank follows widespread reports in the media last week, indicating that the Prudential Authority (PA) has appointed Mr Johan Kruger to oversee the affairs of the bank, marking the initiation of a process to wind down its deposit-taking functions.

It is important to recall that Ithala Bank (officially known as Ithala Limited) has grappled for years to obtain a banking license, with the South African Reserve Bank (SARB) outlining specific requirements for its issuance.

Unfortunately, due to a lack of political will from government, the bank did not receive the necessary support to meet these requirements and obtain the license.

In its struggle, the historic bank was compelled to form a partnership with ABSA to access the national payment system. Regrettably, instead of assisting the bank in fulfilling the required criteria, politicians from the ruling party, along with their politically-connected associates, treated it as a personal financial resource, leading to its collapse.

Some engaged in public relations exercises by opening bank accounts, with the media in tow, rather than providing funds to meet the SARB’s demands for senior officials.

For every generation, Ithala Bank holds a special place in the hearts of the people in this province.

Founded by the late HRH Prince Mangosuthu Buthelezi, its primary goal was to economically empower black individuals and businesses during a time when the apartheid government marginalised them.

The distressing news of the imminent closure of Ithala Bank, an institution founded by the IFP’s late Founder and President Emeritus, HRH Prince Mangosuthu Buthelezi, is a devastating blow to black-owned businesses and individuals alike.

This regrettable development highlights the ongoing efforts of government to undermine the positive legacy of Prince Mangosuthu Buthelezi, evident in the closure of institutions like teachers’ colleges and numerous industries in KwaZulu-Natal, depriving thousands of job opportunities.

Established with the primary aim of economically empowering black individuals and businesses during apartheid, Ithala Bank, under HRH Prince Mangosuthu Buthelezi’s leadership, played a crucial role in supporting communities.

The government’s failure to sustain these positive initiatives, reflected in the closure of Ithala Bank and other institutions, is a clear indication of their disregard for the lasting impact and contribution of Prince Mangosuthu Buthelezi’s legacy.

The bank extended its impact by encouraging people to save money, offering stokvels specials.

Ithala’s footprint can be found in townships and rural towns, where many businesses it funded still stand. In major business parks like River Horse Park in Durban, black-owned businesses, initially supported by the bank, continue to thrive.

It is disconcerting that the institution faces closure. We urge bank officials to provide clear guidance on the fate of funds invested by its customers.

We vehemently oppose a repetition of the unfortunate events that transpired with the clients of the erstwhile VBS Bank or the occurrence of a bank run. Transparent and timely communication with clients is imperative.

Furthermore, we believe that the bank could still be rescued and transformed into a fully-fledged State bank, but this requires political will.

Currently, the political leaders in KZN seem more preoccupied with their own nefarious agendas, rather than salvaging this historic institution.

As servant leaders, an IFP in Government, post the 2024 election, will ensure that uMntwana waKwaPhindangene’s legacy and all the institutions he built, are protected, supported and multiplied.

IFP KZN Provincial Chairperson and Premier Candidate
Cllr Thami Ntuli
072 585 5000

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