VBS customers queue up to get their cash from Nedbank

13 July 2018 - 09:33 By Timeslive
A branch of VBS Mutual Bank in Thohoyandou, Limpopo.
A branch of VBS Mutual Bank in Thohoyandou, Limpopo.
Image: Antonio Muchave

South Africans desperate to get their cash out of failed bank VBS Mutual are lining up on Friday to draw out their savings - as much as they are allowed to by authorities handling the fallout.

Today is the first day that VBS customers can withdraw their money from Nedbank branches‚ following the National Treasury's guarantee of deposits up to R100‚000 per deposit holder‚ letting individuals‚ stokvels and burial societies access their cash.

VBS customer Azwindini Makhokha expressed his relief on live television‚ even though he could not withdraw all of his savings.

"I'm here at Nedbank to withdraw R100‚000 because I've got R115‚000 in the bank so today I'm very very happy. Everybody is smiling today because‚ hey‚ we suffered a lot‚ sleeping in the queues‚ everything‚" he told eNCA's Zikhona Tshona.

People were lining up from as early as 4am in Thohoyandou‚ according to SABC's Rudzani Tshivhase.

A member of Magiabila Family Society‚ one of the investors in the troubled bank‚ told the Sowetan newspaper he was relieved that today marked the start of a process of giving them access to their funds‚ after a period of confusion and frustration.

"Since the South African Reserve Bank made an announcement this week‚ people are no longer sleeping outside the bank in Thohoyandou. We are happy our government has intervened with immediate effect to save our money."

VBS is under curatorship for the safety of depositors.

In a recent notice‚ the curatorship team - anticipating the surge of customers at bank branches - assured deposit holders: "You don't have to rush to Nedbank to withdraw your money‚ as your money is safe."

The curators said to access their funds‚ individuals had to visit their closest Nedbank branch with a valid identity document and proof of residency not older than three months.

"Nedbank was chosen to receive all VBS Mutual Bank transactional accounts because of its branch location‚ capacity‚ systems‚ manpower and most relevant product offering and product pricing‚" the team said.

Explaining the limit on withdrawals‚ the curators said: "Customers are guaranteed up to R100‚000 of their available balance. Customers wishing to withdraw above the R100‚000 guaranteed limit of funds currently available in their accounts‚ will not be able to do so as the limit set by Treasury is R100‚000."

Those with extra savings will have to adopt a wait and see position - which is not what ordinary people like Sophie Mulaudzi want to hear. She told eNCA of her frustration on Friday‚ saying she has saved over R300‚000 with the bank over many years - and wants to get it back.

The curators said: "The excess monies over the R100‚000 guarantee will remain with VBS Mutual Bank and depositors will not have access to these funds until further notice. (We) will continue to pursue assets for the benefit of the relevant creditors. Recovered monies will be disbursed to retail customers who hold more than R100‚000‚ alongside with trade creditors and corporate depositors."

The curators "will update these depositors and creditors as and when appropriate".

Anyone owing money to VBS must keep paying.

"All loan account contracts remain with VBS Mutual Bank and are enforceable‚" said the curatorship team.

BusinessLIVE reported that the South African Reserve Bank painted a grim picture on Monday that suggests as much as 75% of VBS Mutual Bank’s assets may have been stolen by its executives and directors.

"It’s a travesty that the failure of management put so many depositors at risk‚" said Reserve Bank governor Lesetja Kganyago.

The newspaper said the bank’s failure may yet have grave consequences for municipalities in some of the poorest parts of the country‚ which stand to lose almost all of the R1.6-billion they deposited with VBS‚ increasing the risk of budget shortfalls and violent protests that could result from a lack of service delivery.