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BLF: VBS Bank being punished for giving Zuma loan

Sarb Governor Lesetja Kganyago announced that VBS Mutual Bank has been placed under curatorship with immediate effect.

Picture: vbsmutualbank.co.za

JOHANNESBURG - Black First Land First (BLF) says the African National Congress (ANC) is killing black empowerment by allowing the South African Reserve Bank to shut down the VBS Mutual Bank.

The bank made headlines when it granted a R7.8 million loan to former president Jacob Zuma to settle debt relating to the upgrades to his Nkandla homestead back in 2016.

BLF says the bank, which has been placed under curatorship, is being punished for being black-owned and for giving a loan to Zuma.

Spokesperson Lindsay Maasdorp said: “We see this as an attack orchestrated by white monopoly capital to make sure that all those who are pro-black organisations are crushed. BLF says hands off VBS Bank and nationalise the Reserve Bank now.”

However, in Sunday afternoon's briefing, Governor Lesetja Kganyago dismissed claims that the Reserve Bank meddles in the affairs between banks and their clients, sternly affirming that each bank's management is solely responsible for loans it issues to members of the public.

“VBS experienced increasing liquidity challenges over the last 18 months. These problems emanated from a failure of the board of directors and executive management to manage the bank’s rapid growth and its funding and liquidity position.”

He says this resulted in VBS being placed under intense regulatory scrutiny.

“The liquidity challenges emanated from the maturity of a large concentration of deposits from municipalities and was exacerbated by the termination of other sizable deposits and the inability to source sufficient funding timeously.”

He says it was highly risky for the bank to take sizable municipal deposits that were short-term and lend them out long term.

“The minister of finance, upon the recommendation from the Registrar of Banks, has decided to put VBS Mutual Bank under curatorship with effect from 5 pm on Sunday, 11 March 2018.”

The bank is expected to operate as normal on Monday.

(Edited by Winnie Theletsane)