South African banks are entrusted with the earnings and savings of the country’s citizens. They are strictly monitored and regulated by the South African Reserve Bank (SARB) and the National Treasury, among other agencies and institutions, to ensure the safety of depositor’s money and the stability of the financial system.
The security and stability of the banking system is essential for attracting investment into the country and facilitating economic growth, job creation and social development.
The collapse of a bank – no matter how big or small – often results in those who can least afford it losing access to their money, and harms business, consumer and investor confidence in the country. South Africa cannot afford this, especially as it is just starting out towards inclusive economic recovery.
In placing VBS Mutual Bank into curatorship, the Reserve Bank acted within its mandate and the law and independently of special interests. The primary purpose of placing a bank under curatorship is to protect depositor’s money and the national financial system, while the business is placed on a sound footing.
BASA has full confidence in the Reserve Bank. Its actions underline the importance of having an independent, impartial reserve bank that protects the interests of all South Africans. The Bank’s commitment to inflation targeting and price stability serves to protect the value of the money of the poor, and helps create a stable business environment, which is essential for economic growth and social development.
The Banking Association South Africa is committed to the transformation of the financial services industry, increased competition and empowered management and ownership. However, this must be done in a way that creates sustainable businesses that can offer communities safe and secure financial services.
All South African banks must adhere to the letter and spirit of the law and be able to fulfill their legal duty of care to those who entrust their earnings to them.