By: Nkhensani Chauke
THE Standing Committee on Finance has spurned an apology from the National Treasury’s Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA) that they cannot make a session on the embattled Ithala Bank.
The bank is facing numerous challenges that have led to the suspension of its Financial Services Provider licence.
The committee had scheduled a two-day oversight visit in Durban starting on Tuesday. The FSCA apologised on Monday for not being able to attend.
Committee media officer Malatswa Molepo said they regarded the matter as urgent in light of the continued viability of the bank and the possible negative consequences on the bank’s depositors if the challenges were not dealt with.
“The letter forwarded to the committee is unacceptable and has the potential of undermining the important oversight work of the committee. Furthermore, the reasons provided are inadequate and should have been raised in the meeting of 27 August 2024 where the resolution to undertake the oversight was taken,” said committee chairperson Joe Maswanganyi.
“As a result, the PA and FSCA are expected to attend today’s session in Durban.”
Meanwhile, the committee has mandated the Ithala board and management to tabulate issues behind the suspension of the licence and remedial measures they are intending on taking.
The committee acknowledged the presentations made on Tuesday, but noted that they did not address the key challenges faced and how they would be resolved.
“To ensure effectiveness of the oversight we are undertaking, we need scientific outputs that talk to the challenges and how they will be resolved.
“While the committee acknowledges that the matter is emotive and has the potential to affect millions of depositors mainly in rural areas, it is important that the response of the bank must be meticulous and detailed to ensure effective resolution,” said Maswanganyi.
The committee has expressed concern over the suspension of the licence since it has implications on the viability of the bank due to its inability to onboard new clients, including grant beneficiaries residing in rural areas.
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