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VBS Mutual Bank being victimized

11 March 2018 2:24 PM
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VBS Mutual Bank being victimized

Cape Town – The Reserve Bank should only place VBS Mutual Bank under curatorship as a last resort, the Economic Freedom Fighters (EFF) said in Sunday.

The party issued a statement following a report in the City Press that the mutual bank is facing a liquidity crisis after Treasury instructed municipalities to stop investing with the bank.

A number of councils withdrew more than R1bn from the bank after Treasury gave the order early last year. City Press reported that the South African Reserve Bank (SARB) is expected to place the bank under curatorship this week if it does not get the necessary cash injections for its reserves.

However, the EFF believes that alternative rescue measures must be considered before placing the bank under curatorship. “Opting for curatorship as the first measure undermines the bank and undermines black people’s participation in the ownership and control of financial services institutions,” the party’s spokesperson Mbuyiseni Ndlozi said.

The EFF also criticised government’s actions for undermining and hindering the participation of black people in the financial sector.

“The EFF is aware that VBS is being victimized due to a loan it gave to MrJacob Zuma for a house in Nkandla. Had it been a white-owned bank that had offered Zuma a loan, they would not be subject to victimization today.”

VBS came into the spotlight when it was revealed that the bank granted the former president a R7.8m bond to pay for security upgrades at his Nkandla residence.

The EFF plans to write to the SARB and Treasury to consider other rescue missions before placing VBS under curatorship.

“We call on the minister of finance to not grant the concurrence needed for curatorship to happen. The minister must instruct the Reserve Bank and other shareholders, like the Public Investment Corporation (PIC) to find a long lasting solution other than placing the bank under curatorship.

“It must not be easy to destroy financial services institutions that are owned by black people,” said Ndlozi.

The Reserve Bank will hold a press briefing on VBS Bank at 17:00 on Sunday.

Source: fin24.com

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