Monday, 12 March 2018

South African lender goes into administration amid 'liquidity crisis'

VBS Mutual Bank failed to repay money owed to the municipalities.

VBS Mutual Bank, one of South Africa’s smallest lenders, has been put into administration after it was unable to repay money owed to municipalities, according to the country’s central bank.

The management team has been relieved of its duties and a curator from the auditing firm SizweNtsalubaGobodo put in place following a “severe liquidity crisis”, Lesetja Kganyago, governor of the South African Reserve Bank, told reporters. Retail depositors’ money is guaranteed and VBS will stay open, he said.

VBS has operated as a licensed mutual bank, funded by its members, for 25 years, according to its website. The lender, which isn’t listed, gained attention in 2016 when it gave former President Jacob Zuma a mortgage to settle a Constitutional Court order to repay taxpayers some of the money spent upgrading his private residence. The bank was fined 500,000 rand (Dh155,416) last year because of weaknesses in its control measures to prevent money laundering and combat the financing of terrorism.


Full story at The National.

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