The South African Reserve Bank (Sarb) has placed the struggling Ubank under curatorship with immediate effect
Ubank operates in the microfinance sector which mainly targets lower-income blue-collar workers in the mining industry,
Sarb governor Lesetja Kganyago said that Ubank was placed under curatorship due to corporate governance concerns.
Kganyago pointed to a high number of internal control weaknesses, and the prolonged period it has taken to secure the injection of sufficient capital to comply with the minimum capital requirements.
“This is being done to proactively mitigate the adverse consequences on Ubank's depositors, and to preserve the stability of the South African banking and financial services sector as a whole,” Kganyago said.
“The curatorship is a protection procedure which gives the Prudential Authority the legal means to create the necessary space to implement a resolution plan.”
Kganyago said depositors of Ubank will have continued access to their money and other banking services offered by the bank in the ordinary course of business as it remains “highly liquid”.
Finance minister has appointed KPMG South Africa as the curator, with Zola Beseti as the representative.
Kganyago said KPMG South Africa will be responsible for Ubank with immediate effect, and with the full authority the law confers on the curator.
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