In a major breakthrough for thousands of affected clients, KwaZulu-Natal Premier Thami Ntuli has announced that all Ithala Bank depositors will have access to their frozen funds before Christmas.
The announcement follows months of legal battles and uncertainty for depositors who have been unable to access their money. The resolution comes from an agreement between the KZN Provincial Government and the National Treasury.
Speaking at a briefing, Premier Ntuli confirmed the development. “Our agreement with the minister was that before Christmas people will have access,” he stated. He acknowledged the severe challenges faced by ordinary depositors, describing the situation as “bad in terms of the effect to the ordinary depositors.”
The Premier detailed the planned rollout, stating, “People will be able to access their money in an institution that will be announced soon.” He emphasized that arrangements would be made to reach clients in remote rural areas with the necessary information and to ensure they could access their money at the most convenient branch.
The path to this resolution has been complex, marked by litigation. Ntuli referenced rulings by the Pietermaritzburg High Court and subsequent appeals by the Prudential Authority, which regulates banks. These legal processes caused significant delays.
“It’s unfortunate that we have gone through this challenge,” Ntuli said, attributing the primary obstacles to the Prudential Authority. “We experienced some litigations wherein we had to go to court to see the interference by the PA to stop the businesses of Ithala. That is where we were experiencing a problem.”
He explained that the involvement of the National Treasurer, providing a guarantee or loan, was key to separating the depositors’ funds from Ithala’s ongoing operational issues. “They will be no longer be handled under Ithala. They’ll be handled somewhere else,” he said.
Looking ahead, the Premier outlined a two-phase approach: first ensuring depositors recover their money, and then working to bring Ithala Bank into full regulatory compliance so it can operate normally again. Ithala has been operating under an exemption from full banking license requirements, which was halted.
Premier Ntuli expressed relief that the “first layer of the challenge has been resolved” and offered an apology on behalf of the government. “We have apologized to the people of the province because though we inherited the problem… the people at last they going to get their money.”
While a specific date for the payout was not announced, the Premier expressed confidence, stating, “We are of the view… that all the depositors should be able to access their money before Christmas.” He noted that the final details are being settled between the provincial government and the National Treasury.
The news brings hope to depositors, many of whom have reported severe personal and business hardship due to the frozen accounts, including unpaid salaries and stalled operations.