The South African Reserve Bank said on Sunday that the Registrar of Banks has placed VBS Mutual Bank under curatorship.
It added that the Registrar of Banks has appointed auditing firm Sizwe Ntsaluba Gobodo as the curatorship of VBS Mutual Bank.
This comes after City Press newspaper reported on Sunday that VBS Mutual Bank faced the possibility of a spectacular crash after National Treasury’s instruction to municipalities to stop investing with the institution.
The VBS Mutual Bank received a permanent Mutual Bank License on 11 October 2000.
VBS has its roots in a 1980s building society based in Venda, a rural area given a degree of autonomy by the apartheid government before 1994. It has 30 000 clients with deposits of around R800 million.
The board of VBS Mutual Bank has been relieved of their duties.
South Africa’s Reserve Bank Governor Lesetja Kganyago told a televised news conference on Sunday that VBS Mutual Bank has been placed under curatorship because of liquidity issues.
VBS Mutual Bank became popular after it granted former President Jacob Zuma a loan to finance the R7.8 million he owed relating to the upgrades of his private residence in Nkandla.