Ithala is pursuing Bidvest Bank as a replacement sponsor on the national payments system.
- Absa, Ithala’s sponsor for the past 20 years, will no longer be supporting the company as of May 1.
- Ithala approached Standard Bank as a potential sponsor after Absa’s decision to end their relationship.
- Bidvest Bank has expressed its intent to support Ithala through a proposed strategic alliance, but no agreement is currently in place.
- Without a sponsor, it becomes practically impossible for Ithala to conduct business and transactions in South Africa.
- The Prudential Authority (PA), which reports to the Reserve Bank, appointed a repayments administrator to oversee Ithala’s deposit-taking activities and repayment of unlawfully obtained money.
- Ithala has faced challenges in obtaining a banking license due to insufficient capital and lack of requisite banking skills and systems. It has proposed an alliance as an interim solution to host its deposits while working towards becoming a licensed commercial bank.