Pretoria: National Treasury has assured the retail depositors of Ithala SOC Limited that their deposits will be protected by a government guarantee, subject to the conclusion of the necessary technical work.
According to South African Government News Agency, following the Prudential Authority’s application for provisional liquidation of Ithala SOC Limited, there are concerns among depositors about the safety of their funds. The Prudential Authority has filed for the provisional liquidation in the Pietermaritzburg High Court, aiming to protect approximately 257,000 depositors. The appointed liquidator will utilize insolvency laws to recover and distribute funds.
Ithala, which operated under a temporary exemption from the Banks Act, failed to meet the conditions required to obtain a banking licence. The exemption, granted by the Minister of Finance, lapsed in December 2023, leaving Ithala unable to continue deposit-taking activities legally.
Treasury stated that the technical work includes providing a government guarantee to one or more banking institutions, ensuring that depositors’ accounts can be migrated in a timely manner and funds made available. They are working closely with the Prudential Authority to ensure an orderly process that protects depositors’ interests.
While depositors are urged to urgently make alternative banking arrangements, they can be assured that efforts are being made to secure their funds. National Treasury will provide further details about the process for accessing guaranteed funds following the court’s decision on the liquidation application.