​VBS liable to go bust

VBS mutual bank faces the possibility of going bust after the Treasury instructed municipalities to stop investing with it.

In 2017, the Municipal Finance Management Act (MFMA) forbade municipalities from investing in mutual banks, which meant that more than R1-billion was withdrawn from the bank, creating a liquidity crisis.

City Press learnt that the VBS is expected to be placed within the curatorship of the South African Reserve Bank if the Public Investment Corporation (PIC) and Vele Investments do not inject cash into the entity.

On Friday, VBS chairperson Tshifhiwa Matodzi accused Sarb and the Treasury of not welcoming “a black bank” and that “black management is incompetent and noncompliant”.

Matodzi further told the registrar of the South African Reserve Bank (SARB), Kuben Naidoo, and the Treasury director-general, Dondo Mogajane, “In the end we were faced with a well-organised and powerful system that does not tolerate growing black banks and black excellence, just as the old African Bank was killed to prevent it from competing with the big guys.”

According to Matodzi, neither the PIC, Sarb or the treasury was willing to negotiate an arrangement. However, Sarb spokesperson Jabulani Sikhakhane told the City Press that both the reserve bank and the Treasury were working to solve VBS’s liquidity crisis.

He argues further that his bank did not receive the same amount of support when the media attacked it for granting a a R7.8-million loan to former president Jacob Zuma to settle the debt for his Nkandla home in 2016, like it supported Capitec whose faced damning accusations after the publication of the Viceroy report.

VBS was established in 1982 and operated as Venda Building Society. In 2000, it received a permanent Mutual Bank License. To date, it has roughly 30 000 clients.

Advertisting

Eastern Cape MEC orders graft investigation after two workers killed...

The killings of two council workers at the Amathole district municipality appear to be linked to tender fraud and corruption

Strike-off case pulls in judge

Judge Mushtak Parker is implicated in an application to strike off his former partners. He is also involved in the fight between the Western Cape high court’s judge president and his deputy

One strike and you’re out – registrar tells unions

A municipal workers’ union is the first to be sanctioned for not following the new rule when deciding whether to go on strike
Advertising

Press Releases

Dr Mathew Moyo’s journey to academic victory

The NWU's chief director for library and information services was appointed as a board member of the National Council for Library and Information Services.

UKZN pays tribute to Joseph Shabalala, Doctor of Music (honoris causa)

The university joins the global community in mourning the passing of legendary musician and founding member of Ladysmith Black Mambazo, Dr Bhekizizwe Joseph Shabalala.

South Africa to be almost R 14-billion wealthier when SAB Zenzele BB-BBEE scheme winds down in April 2020

It’s the biggest BB-BEE FMCG payout in South Africa’s history, with a new scheme to be launched

UKZN vice-chancellor calls for perspective and creative engagement on the way forward

In addition to overcoming the deadlock between UKZN and students, a way must be found to reconcile the university's financial obligations and students' long-term needs.

Survey shows South Africans’ approval of president but not of political parties

According to the survey, 62% of South Africans think Cyril Ramaphosa is doing his job well, while 39% say no political party represents their views.

Introducing the Samsung Galaxy S20: Change the way you experience the world

The Samsung Galaxy S20 series features unprecedented AI camera technologies built for the future of communications

Andrew Makenete joins Africa Agri Tech as an event ambassador

Makenete has a wealth of experience in the agricultural sector

Is your company prepared for the coronavirus?

Companies should consider the direct and indirect impacts of the pandemic when evaluating whether they are prepared for the coronavirus, says ContinuitySA.