To download the soundbite of the Chairperson of the Standing Committee on Finance, Dr Joe Maswanganyi click here: https://iono.fm/e/1477616
Parliament, Thursday, 5 September 2024 – The Standing Committee on Finance on Wednesday urged Ithala Bank to expeditiously resolve all compliance deficiencies as identified by the Prudential Authority and the Financial Sector Conduct Authority (FSCA) to ensure the suspension of its Financial Services Provider (FSP) licence is lifted.
This week the committee concluded a two-day oversight visit to the bank. It also met with regulators.
“What is clear is that the bank must comply with the conditions of the FSP licence,” said Dr Joe Maswanganyi, the Chairperson of the committee. “If Ithala complies with all the issues that are raised by the regulators, the license will be reinstated for the bank to continue in full operation.” The committee noted that some work has been done by the bank to remedy challenges raised by the regulators, but called for full compliance.
The bank informed the committee that it made some strides in resolving identified challenges. This includes filling key executive positions, including that of a Chief Revenue Officer, the appointment of an independent and banking experienced Chairperson of the Board and improving its banking system. While the committee welcomed this progress, it urged the bank to solve all challenges urgently.
Compliance with the Financial Matters Amendment Act will be a catalyst towards securing the future viability of the bank and the security of deposits of its clients. “Currently, the bank is unable to take on new clients, which will hamper the bank’s ability to make profits,” said Dr Joe Maswanganyi. The committee stressed that if the bank achieves compliance and the suspension is lifted, it will reassure the depositors that their money is safe.
The committee stressed that resolving deficiencies in their operation will set the bank further on the path to getting a full banking licence. The bank’s developmental initiatives, ranging from granting loans to emerging small enterprises and home loans to rural communities, are essential in the transformation agenda of a democratic South Africa and must be encouraged.
The committee also cautioned the bank against endless litigation that hampers efforts to address the identified deficiencies. While the committee acknowledges the right for any individual and organisation to approach the courts to resolve disputes, it considers the current trend untenable.
The committee has also reassured the customers of Ithala Bank that for now, their deposits remain safe with the bank and that the committee will do everything in its power to safeguard their interests and ensure that the bank returns to full operation. “There should be no panic on the side of the depositors and we will ensure the protection of their interests,” said Dr Maswanganyi.
ISSUED BY THE PARLIAMENT COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE STANDING COMMITTEE ON FINANCE, DR JOE MASWANGANYI.
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