The ANC’s top six has reportedly warmed up to a plan to save VBS Mutual Bank from liquidation – by merging it with Limpopo’s Economic Development Agency.
This is according to a report by the City Press, citing senior ANC officials who were privy to discussions within the party.
While the ANC is reportedly keen on the idea, other parties, including VBS stakeholders and the Reserve Bank are said to be opposed to the idea, with some even calling it an attempt to protect dodgy individuals who were involved with mass fraud at the bank.
VBS was put under curatorship by the Reserve Bank after municipalities were ordered to withdraw their deposits because they were not allowed to have them in a mutual bank.
Because VBS lent out more money than they had in deposits, this led to a liquidity crisis that threatened to shutter the group.
City Press later revealed that senior executives at the bank were involved with high-level fraud, and pilfered R1.5 billion from the bank through a scheme where false deposits were entered into the system and then withdrawn in cash.
According to the paper, the ANC has ordered a special task team to find ways to save the bank, reportedly taking the position that it absolutely cannot shut down.
Insiders said that while the plan to merge it with government agencies is on the cards, no formal decision has been made.
You can read the full report on the City Press.