JOHANNESBURG - The Public Investment Corporation (PIC), which holds a majority stake in VBS Mutual Bank (VBS), yesterday pledged to work with the bank’s curators after the SA Reserve Bank placed it under curatorship on Sunday.
The PIC said it had noted the decision of the central bank to place VBS under curatorship after it experienced liquidity challenges
“The PIC will work closely with the appointed curator, SizweNtsalubaGobodo, and all other stakeholders, to assist the bank navigate this difficult situation, and hopefully emerge much stronger,” PIC said.
The central bank said the bank’s liquidity problems emanated from the maturity of a large concentration of deposits from municipalities, and was exacerbated by the termination of other sizeable deposits and the inability to source sufficient funding timeously.
VBS is registered with the central bank as a mutual bank. It was established in 1982 and initially operated as the Venda Building Society in the former Venda homeland. The bank was granted a permanent mutual bank licence in 2000.
VBS took the spotlight last year when it gave ex-president Jacob Zuma a R7.8million loan to pay off his Nkandla debt.
The move to place VBS under curatorship was backed by new Finance Minister Nhlanhla Nene, who said the move would “nurse the bank back to health”.
However, the Black Management Forum (BMF) yesterday hit out against the move, saying the curatorship process should not have been the first method of intervention in assisting the bank with its liquidity challenges. “The BMF will seek to engage with the management, shareholders, relevant key stakeholders of VBS, as well as those from Treasury to get the full details and context on this matter and a decision taken,” the BMF said.
“The BMF hopes the outcome of the consultations with the relevant parties concerned will get VBS back to a fully operational board
“The BMF urges that the VBS commercial licensing application process is expedited to ensure that they do not wait the normal 12 to 18 months review period.”
The decision also drew the ire of trade union federation Cosatu, which said the move was further evidence of why the bank should be nationalised.
Cosatu spokesperson Sizwe Pamla said the Reserve Bank’s decision to place VBS under curatorship was a reminder that the Reserve Bank had no appetite to see the financial sector transformed.
“The Reserve Bank keeps reminding us why it is a bad idea to have monopolies and a privately owned Reserve Bank By removing the central bank from democratic ownership and control, they place it in a position that makes it easy for conglomerate elites to co-ordinate their private interest,” Pamla said.
The last bank to be placed under curatorship was African Bank in 2014, as part of a rescue plan that included an R10billion capital injection.