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VBS Bank depositors to have access to money from today

The South African Reserve Bank announced this week that one of its main priorities was to protect depositors and, therefore, it has implemented this mechanism.

Nedbank. Picture: Sethembiso Zulu/EWN

JOHANNESBURG – Thousands of VBS Mutual Bank depositors will have access to their funds from today through Nedbank, which is facilitating the repayment of up to R100,000 per depositor.

The South African Reserve Bank announced this week that one of its main priorities was to protect depositors and, therefore, it has implemented this mechanism.

This after VBS Bank was placed under curatorship amid allegations of financial mismanagement and fraud. Retail depositors have been urged not to all rush to the bank today as their funds are secure.

Banking expert Richard Ketley says Nedbank has the ability to cope with these additional accounts.

“It’s not an enormous amount of money from the perspective of the big South African banks. However, as you know, most of us don’t go into a branch very often. What would put pressure on the banks in terms of queues is if everyone immediately shows up at Nedbank and tries to withdraw the money.”

Depositors need to open an account at Nedbank and the money will then be loaded with a balance equivalent to the amount of the guaranteed deposit at VBS Bank.

Only up to R100,000 can be accessed and larger businesses and municipalities will not have access at this stage.

Reserve Bank Governor Lesetja Kganyago said this week they have never indicated that VBS Bank will close but it’s unclear if the bank will make it.

“When we put this bank under curatorship, we were fairly confident that it would make it through and we said we’re less confident now.”

This is because in the opinion of the curator, the 2017 financial statements did not present an accurate account of the bank's financial position and they are, therefore, being restated.

The investigation into possible fraud and malfeasance at the bank is still ongoing but steps have been taken in the meantime to recover money owed to the bank and is expected to be completed by the end of August.

(Edited by Leeto M Khoza)

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