Ithala’s banking licence exemption extended

FINANCE Minister Tito Mboweni has agreed to extend the banking licence exemption for Ithala SOC Limited until December 2021 subject to meeting certain conditions.

This was revealed by deputy governor and chief executive of Prudential Authority, Kuben Naidoo, in a notice published in a government gazette on December 27.

Naidoo said the banking licence exemption notice was granted by the Prudential Authority with the concurrence of Mboweni.

“The exemption notice is called the ‘Designation by the Prudential Authority of certain activities of Ithala SOC Limited’ and comes into effect on January 1, 2020 and expires on December 31, 2021,” Naidoo said.

In his notice, Naidoo sets out the conditions in which Ithala could conduct its business.

“Ithala Corporation shall maintain a separation between the lending activities of Ithala Corporation and any deposit-taking activities conducted by Ithala,” reads the notice.

Ithala will also have to meet certain performance standards in terms of its governance structures if it was to retain the banking licence exemption.

The licensed financial services provider is also expected to have a fit and proper board of directors.

In terms of proper executive structure, Ithala is expected to have a chief executive, chief risk officer, chief internal auditor, chief compliance officer and company secretary.

Also to be appointed is a chief finance officer, treasurer, chief operating officer, chief information officer, head of credit and anti-money laundering officer.

Naidoo said if Ithala failed to comply with the requirements, it will be liable for the payment of a penalty to the Presidential Authority which shall not exceed R5 000 for every day, excluding weekends and public holidays.

“The Prudential Authority may amend or withdraw this exemption notice by notice published on the website of the Prudential Authority.”

Naidoo added that Ithala should submit its application for a banking licence in terms the Banking Act not later than June 30, 2021.

The exemption notice comes at a time Ithala is seeking to obtain a full banking licence to compete with other banks.

No comment was obtained from Ithala at the time of going to press.

Economic Development, Tourism and Environmental Affairs Nomusa Dube-ncube said her department welcomed the “good news” on behalf of the Kwazulu-natal citizens.