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ANC Finance Study Group concerned about VBS Mutual Bank Liquidation

7 November 2018

The South African Reserve Bank (SARB) informed Parliament`s Standing Committee on Finance today that once the Prudential Authority (PA) had evidence that a Mutual Bank is insolvent, the PA is legally obliged to approach the courts and apply for the liquidation of the bank. With this in mind, the ANC Study Group on Finance believes that VBS Mutual Bank should be rescued because the delinquency of a few individuals cannot be justification for the closing our country`s only black owned and run bank.

"We believe that the liquidation of VBS will undermine government`s efforts to transform and diversify the financial sector. Furthermore, the liquidation of VBS will reinforce racial stereotypes that Africans cannot run banks, and that they cannot run entities or participate in the financial sector," said comrade Thandi Tobias-Pokolo, ANC Whip for Finance.

"The status-quo, which has seen the dominance of four commercial banks taking up 85% market share, is unacceptable and unsustainable; especially given our unique history of racial segregation, oppression and economic exclusion. We want to reiterate assertions made by Deputy Minister of Finance, comrade Mondli Gungubele, that the services the bank offers, should remain intact. Chief among these unique services offered by the bank include, savings for burial societies, stokvels and savings clubs," she added.

The ANC Study Group on Finance further reiterates that the relevant law enforcement authorities should act prudently on those implicated in wrong-doing and have been mentioned in the forensic report. We are also gravely concerned by the fact that the Financial Intelligence Centre (FIC) and the South African Revenue Services (SARS), did not pick up or act on the wrong doing and rampant looting that was happening at VBS. Such a breach should have been picked by these regulatory authorities, as their core function is to avert such occurrences from happening. 

Issued by the Whip of the ANC Study Group on Finance, comrade Thandi Tobias-Pokolo.

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