MPs raise concerns over possible closure of Ithala Bank

MEMBERS of Parliament (MPs) on Wednesday voiced significant concerns regarding the potential liquidation of Ithala Bank, a financial institution regarded as a crucial facilitator of socio-economic development in KwaZulu-Natal.

- MAYIBONGWE MAQHINA

The debate, which was held in the National Council of Provinces (NCOP), highlighted fears that the bank's closure could reverse hard-won transformation gains and exacerbate the financial exclusion of historically disadvantaged communities.

Ithala Bank, which has long operated under regulatory exemptions, is facing possible liquidation following an application from the South African Reserve Bank's (SARB) Prudential Authority, citing persistent failures to meet essential banking licensing requirements.

IFP MP and NCOP deputy chairperson Poobalan Govender, who sponsored the debate, said the future of the bank was one important decision that would speak directly to securing the future of socio-economic rights for millions of people.

Govender said the bank was a vehicle that provided economic access in the form of loans to start businesses and to encourage savings and investments.

"If we allow its closure we, risk plunging many into deeper poverty and reversing hard worn gains in socio-economic transformation and leaving millions of people without crucial financial support to sustain businesses and livelihoods," he said.