{"id":834142,"date":"2025-08-06T09:58:54","date_gmt":"2025-08-06T07:58:54","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=834142"},"modified":"2025-08-06T09:59:00","modified_gmt":"2025-08-06T07:59:00","slug":"south-african-bank-placed-under-administration","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/834142\/south-african-bank-placed-under-administration\/","title":{"rendered":"South African bank placed under administration\u00a0"},"content":{"rendered":"\n<p>The South African Reserve Bank (SARB) has taken over the operations of Ditsobotla Primary Savings and Credit Co-operative Bank Limited (DCB) following governance failures.&nbsp;<\/p>\n\n\n\n<p>DCB is based in Lichtenburg, which sits in the Ditsobotla Local Municipality (DLM) in the North West. Its membership is defined by a geographical common bond, meaning that anyone in the broader Ngaka Modiri Molema District can join.<\/p>\n\n\n\n<p>The bank was established by merging the savings and credit co-operatives Aganang, Ikageng and Itireleng, whose original members were employees of Alpha Cement, the Lichtenburg Municipality and Lafarge Cement, respectively.&nbsp;<\/p>\n\n\n\n<p>DCB was officially registered with the SARB on 1 March 2014. As of May 2025, DCB had 1,452 members and reported total assets amounting to R8.3 million. These figures are yet to be audited.&nbsp;<\/p>\n\n\n\n<p>DCB provided its members with deposit-taking services and offered them loans.<\/p>\n\n\n\n<p>However, on 1 August 2025, the Minister of Finance, Enoch Godongwana, placed DCB in resolution on the recommendation of the SARB.&nbsp;<\/p>\n\n\n\n<p>When a bank is placed in resolution, the SARB takes control of and manages the affairs of the affected institution safely and orderly.<\/p>\n\n\n\n<p>The process is intended to prevent further losses to depositors and creditors.<\/p>\n\n\n\n<p>Until 1 June 2023, banks would be placed into curatorship, where a curator would manage the bank. However, the Financial Sector Laws Amendment Act 23 of 2021 (FSLAA) repealed these curatorship provisions and established a new resolution framework.<\/p>\n\n\n\n<p>Under the new system, a deposit insurance scheme has been established, and the SARB acts as the designated Resolution Authority.<\/p>\n\n\n\n<p>DCB was placed in resolution after it failed to meet regulatory requirements over an extended period, with the bank experiencing substantial losses over the last year.<\/p>\n\n\n\n<p>The bank could pay all its creditors, but failed to meet its legal capacity and liquidity requirements.&nbsp;<\/p>\n\n\n\n<p>The SARB added that DCB\u2019s governance, internal controls and operational practices were found to be inadequate and risky for depositors.&nbsp;<\/p>\n\n\n\n<p>Despite heightened supervision and recommendations by the PA, DCB failed to implement the necessary corrective actions, which included:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Diversifying the bank\u2019s membership portfolio to reduce reliance on DLM and address concentration risk<\/li>\n\n\n\n<li>Ensuring that all governance structures and staff undergo training to properly manage DCB\u2019s risks.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What happens next&nbsp;<\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/08\/image-3-e1754466662384.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"577\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/08\/image-3-e1754466662384-1024x577.png\" alt=\"\" class=\"wp-image-834143\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/08\/image-3-e1754466662384-1024x577.png 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/08\/image-3-e1754466662384-300x169.png 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/08\/image-3-e1754466662384-768x433.png 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/08\/image-3-e1754466662384.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure><\/div>\n\n\n<p>The effect of the moratorium is that all legal proceedings against DCB and the obligations of DCB will be suspended until further notice.\u00a0<\/p>\n\n\n\n<p>This means that members of DCB will not have access to the funds they hold there.&nbsp;<\/p>\n\n\n\n<p>However, the moratorium does not affect the payout of covered depositors by the Corporation for Deposit Insurance (CODI), which ensures that depositors have reasonable access to their covered deposits.<\/p>\n\n\n\n<p>DCB\u2019s qualifying depositors are covered for up to R100,000 per depositor via CODI, with the resolution practitioner\u2019s first task being to verify and confirm that depositors so that payouts can proceed quickly.&nbsp;<\/p>\n\n\n\n<p>Members will also have the right to close their accounts and move their funds to another bank of their choice.<\/p>\n\n\n\n<p>Notably, all customers who have loans with DCB are urged to continue paying their loans as they are still legally obliged to do so. Customers could face penalties and other sanctions if they fail to repay monies owed to DCB.<\/p>\n\n\n\n<p>Missing any payments could result in the outstanding amount being added to the loan balance, which will then be reported as a default on the member\u2019s credit record<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ditsobotla Primary Savings and Credit Co-operative Bank Limited has been placed under administration by the Finance Minister. <\/p>\n","protected":false},"author":95,"featured_media":789149,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[23303,3619],"class_list":["post-834142","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-ditsobotla-primary-savings-and-credit-co-operative-bank-limited","tag-sarb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=834142"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834142\/revisions"}],"predecessor-version":[{"id":834146,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834142\/revisions\/834146"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/789149"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}