R336m backing in VBS deposits

SARB: CONFIDENT MUTUAL BANK’S ASSETS ARE QUALITY No guarantees for the funds by municipalities, large

The SA Reserve Bank (Sarb), with the backing of National Treasury, has guaranteed more than R300 million in retail deposits at VBS Mutual Bank. The Sarb last week increased the value of funds guaranteed for retail depositors from R50 000 to R100 000. The guarantee for individual depositors, funeral schemes, burial societies, savings clubs, and stokvels was secured from National Treasury.

At R100 000 per depositor, Sarb has now guaranteed about R336 million in deposits. Total retail deposits with the bank are estimated to be about R370 million, meaning that 97% of the bank’s 22 700 retail depositors will receive all their money, says Sarb deputy governor Kuben Naidoo.

Sarb governor Lesetja Kganyago on Monday outlined an agreement reached with Nedbank to facilitate the payment of depositors’ monies.

From Friday, Nedbank will open accounts for retail depositors and load them with a balance equivalent to the amount of the guaranteed deposit. Retail depositors will then be able to withdraw up to R100 000 of their funds at Nedbank branches or ATMs – retail depositors have three years to claim their deposits.

Nedbank was selected on the basis of fees charged, branch proximity, and comparable products.

Chief executive Mike Brown said Nedbank would up its staff and working hours in proximity to VBS branches in Limpopo as well as dispatch four mobile branches, and hold town hall meetings to engage with VBS depositors.

Brown said they would not charge for the help it was asked to provide in the matter. “Nedbank hopes the vast majority of VBS retail depositors retain their new Nedbank accounts and remain as satisfied customers of Nedbank into the future.”

To date, no guarantees have been provided for the funds deposited by municipalities, large businesses and corporates.

VBS had more than R1.5 billion in municipal deposits when placed under curatorship.

Naidoo said: “Our [Sarb and Treasury] view, at this stage, is that there are sufficient quality assets to be able to recover the R336 million for the guarantee.”