Registrar of banks asked to probe VBS

THE registrar of banks‚ Kuben Naidoo‚ has been requested by the DA to immediately establish a commission of inquiry into VBS Mutual Bank and municipalities that illegally deposited funds with the bank.

A thorough investigation was needed to ascertain the extent of the problems, given the increasing number of allegations and the potential loss of billions of rands of municipal deposits‚ the DA’s Kevin Mileham said yesterday.

The party urged Naidoo to establish a commission similar to the one when African Bank was placed under curatorship.

As the DA’s cooperative governance spokesman, Mileham said the call followed a series of scandals which had drawn attention to the institution’s conduct that:

ý Municipalities illegally deposited funds at VBS Mutual Bank;

ý Lawyers were paid commission to induce such deposits;

ý VBS was advised in August that it was acting illegally in taking such deposits, but continued;

ý The bank utilised short-term deposits (from municipal funds) to finance long-term loans; and

ý It had high-value loans with bank officials‚ shareholders and individuals or entities.

“The DA will not permit corruption or financial maladministration to cripple service delivery to people on our watch‚” Mileham said. – TimesLIVE