KZN government assures Ithala Bank depositors will be repaid by month-end after year-long freeze

Stephen Grootes interviews KwaZulu-Natal Finance MEC, Francois Rodgers about the latest developments in Ithala Bank.

Listen to the interview in the audio player below.

The KwaZulu-Natal (KZN) provincial government has assured Ithala Bank depositors that they will finally regain access to their funds before the end of the year.

It's long-awaited relief after nearly a year of frozen accounts that left small businesses, investors and community stokvels cash-strapped.

The assurance comes after months of uncertainty at the state-owned financial institution, which spiralled into crisis earlier this year when the Prudential Authority applied for its liquidation, arguing that Ithala was technically insolvent.

The Reserve Bank previously raised concerns that the institution could no longer manage its own operations, deepening the anxiety among depositors and raising questions about governance at the money lender.

The KZN executive council strongly opposed the liquidation bid, insisting the bank could still be rescued.

Speaking to Stephen Grootes on The Money Show, KZN finance MEC, Francois Rodgers says it's been a long and arduous journey to come to a favourable conclusion, particularly for those who deposited money intoIthala.

"You'd remember in January, the repayment administrator that was appointed by the Prudential Authority basically hamstrung Ithala and shut it down. Didn't just shut down the actual depositors side of it, but shutdown bank,"said Rodgers.

"We've been in and out of court with the repayment authority, because we felt he exceeded his mandate, which two court ruling found in our favour."

"We got a R2.2bn loan from national government, which that with the R1bn that Ithala has cash in the bank itself, we are now in a position to ensure that every single rand that is deposited in Ithala will be able to be accessed by those particular clients."

"We believe we'll get out of this situation. And the most important thing to us, is that the depositors are going to get their money. That was what worried us as government," added Rodgers.

Scroll to the top of the article to listen to the full interview.