Gogos and go-getters caught up in VBS’s mess battle for cash every day

● Suzan Mukwevho was overjoyed in February when she scored a catering contract with the Madzivhandila College of Agriculture in Thohoyandou, Limpopo.

The small-business owner’s company, Suzemike Enterprise, was awarded a contract to feed the students breakfast, lunch and supper.

But a few days after her first payment, her business account with VBS Mutual Bank was frozen when the bank was placed under curatorship.

“They told me my money is frozen and I can only withdraw R1 000 a day. But that’s a problem because I don’t use less than R3 000 a day for my business,” said a distraught Mukwevho.

When her account was frozen, Mukwevho had R300 000 in VBS.

She had to borrow to keep her business afloat, at times from loan sharks at exorbitant interest. To ensure she received her monthly payment for services rendered, Mukwevho — who has been banking with VBS since 2012 — opened a new business account with one of the better-known banks.

She has had to queue at an ATM daily to withdraw the R1 000 that VBS curator Anoosh Rooplal has stipulated as a maximum daily amount that VBS clients can get while the bank is still under curatorship.

Whenever Mukwevho inspects her VBS bank statements, she discovers that she is

We didn’t create this problem, why should we have to suffer? Suzan Mukwevho Suzemike Enterprise

charged R11.40 for every R1 000 she withdraws. With R249 000 still held at VBS, she will have paid close to R3 000 in bank charges by the time she withdraws her final R1 000. That’s if she even gets to do so — there is no guarantee that depositors will get all their money back.

“They said we would get our money back after three months, but this hasn’t happened. We didn’t create this problem, why should we have to suffer?” asked Mukwevho.

VBS experienced a liquidity crisis after municipalities that put a combined R1.5-billion in the bank were instructed by the National Treasury to withdraw it because they were not permitted under the Municipal Finance Management Act to invest monies in a mutual bank.

The Reserve Bank then placed it under curatorship and instituted a forensic investigation into what went wrong. The curator has since discovered that R900-million that was held by VBS cannot be accounted for.

The curator has instructed all VBS branches to stop taking deposits from new customers.

Stokvels, community funeral schemes and ordinary depositors that had invested millions in VBS are desperately trying to their get their money back. Long queues form outside branches every day as mostly rural women in Thohoyandou and adjoining areas in Limpopo hope to withdraw their hard-earned savings before the bank crashes.

Rooplal said this week he was no longer sure the bank could still be salvaged, hence his instruction that no new accounts be opened at VBS.

“Given the irregularities that have been uncovered, the curator is currently not as confident as he was when he first assumed his role. He is therefore managing the bank prudently so as to protect depositors. He is therefore not accepting new accounts into VBS,” Rooplal said in written responses to questions from the Sunday Times.

He said the R1 000 daily withdrawal limit was put in place to protect retail depositors due to the bank’s precarious liquidity position.

“The curator is still committed to achieving the best possible outcomes for the bank,” said the curator.

Meanwhile, two of the three service providers whose contracts with VBS were terminated by the curator are taking him to court claiming they are owed millions by the bank. Cleaning company Nkumbuzo and communications firm Gogoro have issued legal notices to the curator asking that they be paid monies owed to them at the time their contracts were terminated.