Ithala CEO Dr. Thulani Vilakazi told the Standing Committee on Public Accounts (Scopa) on Thursday that the business’s struggles are largely due to the intervention of the Prudential Authority (PA) and the repayment administrator (RA). He revealed that he no longer has control over the operations, stating he can’t make decisions or sign anything without the RA’s approval. This has resulted in incomplete projects, unpaid service providers, and staff resignations.
Ithala has faced severe restrictions under the PA’s oversight, with the PA stating that its intervention aims to protect Ithala’s 257,000 depositors. Despite these challenges, the KZN Department of Economic Development’s Nhlakanipho Nkontwana noted that Ithala was not technically a bank, though it operates similarly. He emphasized that external authorities, including the PA, dictate when Ithala can function as a bank.
Ithala has faced further difficulties with key staff resignations, unpaid salaries, and the fallout from an instruction by the PA to pay all depositors within 14 days, which was deemed impossible. Despite the ongoing crisis, Ithala maintains that it is solvent, citing government backing and secured funds. Looking forward, Vilakazi stated that the bank may need to partner with a commercial bank if it does not receive a banking license or if the court rules against Ithala.