SARB confidence in saving VBS declines

The South African Reserve Bank’s confidence in saving troubled VBS Mutual Bank has declined since it was placed under curatorship in March, chief executive of the Prudential Authority Kuben Naidoo said on Tuesday.

“The day that we put the bank under curatorship, we were very confident that we could save the bank and that it was largely a liquidity problem,” Naidoo said. “Where we sit today, I think it would be fair to say, we are slightly less confident that we are able to save the bank.”

Naidoo made these comments following the release of the 2017 banking supervision report.

READ MORE: VBS fined R2.5m for flouting money-laundering regulations

VBS was placed under curatorship after it experienced a liquidity crisis and could not meet its commitments to the national payments system. In the aftermath however, its curator Anoosh Rooplal revealed in court documents that around R900-million could not be accounted for, along with other practises hinting at possible fraudulent activity.

The Reserve Bank has since initiated a forensic investigation into VBS.

But Naidoo said the regulator would continue to do everything in its power to rescue VBS, adding that while its “level of confidence is slightly lower, that’s not to say that it is zero”.

READ MORE: Stokvels reel from VBS bank’s collapse

According to the banking supervision report VBS was fined R2.5-million last year, for failing to comply with regulations aimed at preventing money laundering and combating the financing of terrorism.

An amount of R2-million was suspended for a year and VBS was given a directive to take remedial action to correct the deficiencies in its controls.

The bank was fined for not identifying and verifying customers’ details, and failing to report certain cash transactions over R25 000 to the Financial Intelligence Centre (FIC). It also failed to “implement adequate methods in relating to the sanctions screening of customers to ensure that the bank complies with its reporting duties,” the report noted.

The bank also did not have adequate controls and methods in place to report suspicious and unusual transactions.

READ MORE: VBS-linked Limpopo municipalities face provincial probe

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Lynley Donnelly
Lynley Donnelly
Lynley is a senior business reporter at the Mail & Guardian. But she has covered everything from social justice to general news to parliament - with the occasional segue into fashion and arts. She keeps coming to work because she loves stories, especially the kind that help people make sense of their world.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Opposition caucuses on panel for Ramaphosa impeachment probe

The parties want to leave the speaker little discretion in composing the panel that will decide whether there is a case for impeaching the president

Gallo celebrates 95 years

The history of Africa’s first record label is studded with successes — and controversies

Amazon may threaten SA retailers

Amazon plans to move into South Africa in 2023 and the world’s biggest online marketplace might give local companies a run for their money

Creecy shoots down Karpowership appeal but extends a lifeline to...

The Karpowership proposal lacked proper environmental assessments, according to the minister, with noise impacts specifically noted
Advertising

press releases

Loading latest Press Releases…
×