Edtea MEC says closure of Ithala Bank would severely impact KZN's most vulnerable residents
MEC Musa Zondi emphasises the urgent need for regulatory clarity to support Ithala Bank, highlighting its critical role in empowering the rural poor and ensuring financial inclusion in KwaZulu-Natal
KwaZulu-Natal Economic Development, Tourism and Environmental Affairs (Edtea) MEC Reverend Musa Zondi. Picture: Facebook/Edtea
Image: Facebook / Edtea
MEC for Economic Development, Tourism and Environmental Affairs (Edtea) Musa Zondi has emphasised the need for regulatory certainty to clarify the position of entities like Ithala SOC Limited.
Zondi stated that the current challenges faced by the bank starkly contrast with the promises made by the country’s parliament. He said, “Most of the issues confronting this institution stem from its position in a regulatory gap—a gap that parliament can help close. The current version of the Financial Matters Amendment Act of 2019 excludes provincial entities from being licensed as banks.
Zondi made the remarks while delivering his departments budget recently.
“However, parliament's own records indicate an intention to allow Ithala to continue operating under exemptions, pending further deliberations. What is needed now is not only regulatory certainty but also a major transformation exercise to ensure that Ithala SOC Limited continues to serve as a pillar of development, equality, and opportunity in KwaZulu-Natal and beyond.
Zondi said Ithala is not merely a financial institution; it is an instrument of transformation, empowerment, and inclusive development. He added that apart from providing banking services to the people of KwaZulu-Natal; it is a symbol of hope for the region's residents, particularly the rural poor, township entrepreneurs, informal traders, pensioners, and SASSA recipients who cannot afford to be excluded from financial services due to their distance from urban centres.
He added, “Let me be clear: the proposed closure or liquidation of Ithala would not just mean the loss of jobs. It would result in a financial disaster for communities that have no alternative service provider. It would endanger over R2.5 billion in cash deposits, mostly from low-income individuals, SMMEs, and cooperatives.
“It would compromise access to housing, vehicle, and business finance in areas which commercial banks ignore. Honourable Speaker, the vision of Ithala has always been aligned with the country’s national agenda, which is financial inclusion, economic redress, and building a capable developmental state,” the MEC concluded.