Sandile Mkhize from Azalea in Pietermaritzburg was one of several dozen people who braved the rain to wait in a snaking queue outside an Ithala bank branch on Tuesday.
Concern was etched on his face as he told TimesLIVE Premium about his challenge after his account at the bank was frozen.
"We had a stokvel account with Ithala. We tried to withdraw the money, and it was transferred into our account, but then after a few hours the bank reversed the money," he said.
The reversal caused the stokvel members to turn against each other, Mkhize said.
"We were accusing each other of doing something — until we heard that the bank is facing some challenges."
Mkhize and his stokvel members are among thousands of clients who have been caught in Ithala’s financial woes.
Nobuhle Gwala from Ezinketheni near Copesville, who has banked with Ithala for more than 20 years, said life is hard after her account was frozen. She now has no access to her money.
Gwala was one of those who stood in the queue on Tuesday to inquire about her money.
"We are starving at home because I do not have access to my account. We do not have food to eat and I do not have money to go to work," she said.
The situation is dire, she said.
"I am disappointed with what is happening. This came as a shock to us, the clients."
What made the situation worse was that they were not notified, Gwala said, adding that it would be better if their cards worked at other banks.
Gwala said she hopes the bank will not be liquidated.
The frustrated customers listened as the chief whip of the uMkhonto weSizwe (MK) Party in the KwaZulu-Natal legislature, Mervyn Dirks, lashed out at the government of national unity (GNU) led by President Cyril Ramaphosa, accusing them of being behind the liquidation of Ithala.
We have seen the sabotage the institution was subjected to. The decision not to grant Ithala a licence speaks volumes
— Mervyn Dirks, MK Party chief whip in the KwaZulu-Natal legislature
Speaking outside the offices of Ithala in Pietermaritzburg on Tuesday, Dirks said the decision to liquidate Ithala was prompted by "white monopoly capital".
"The GNU with their sleeping partners, the white monopoly capitalists, have seen the money that is in Ithala, and they have decided to liquidate it, because the money is there," he said.
Ithala was functioning well and there was no rationality for liquidating it, Dirks said.
"By the way, the decision to liquidate Ithala came as no surprise because we have seen the sabotage the institution was subjected to. The decision not to grant Ithala a licence speaks volumes and that is why we are here now."
The MK Party would defend the bank, Dirks added.
"We will not allow this to happen under our watch."
Posted by Sandile Ndlovu on Tuesday, January 21, 2025
This comes as the National Treasury and the South African Reserve Bank (Sarb) attempt to move 76,000 Sassa beneficiaries from the troubled banking institution to avoid a situation where beneficiaries don't have access to their payments.
Finance minister Enoch Godongwana agreed with the Sarb that the more than 76,000 Sassa beneficiaries should be moved to a commercial bank. However, this move means the Treasury will have to put up a financial guarantee, which Godongwana said he has already agreed to.
The Prudential Authority applied for the liquidation of Ithala to safeguard the interests of its more than 257,000 depositors, “as the appointed liquidator will be able to utilise insolvency legislation to recover and distribute their funds to the extent possible”.
Ithala was never granted a banking licence but was granted an exemption by Godongwana in July 2022 that allowed it to accept deposits.
Money for stokvels, funeral clubs and co-operatives is now trapped in the bank, with depositors unable to access it.
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