The Inkatha Freedom Party (IFP) has strongly criticized the decision made by the South Africa Reserve Bank’s Prudential Authority to file for the liquidation of Ithala Bank SOC. IFP president Velenkosini Hlabisa expressed his disapproval of the move, stating that the party will take to the streets to oppose it. Hlabisa emphasized the importance of defending Ithala Bank, which he described as the backbone of the black economy.
The IFP plans to support Ithala in its opposition to the application for provisional liquidation by the Prudential Authority at the Pietermaritzburg high court. Hlabisa referenced the cases of VBS Mutual Bank and African Bank, highlighting the consequences of their collapse and emphasizing the need to prevent a similar fate for Ithala.
Ithala Bank, a subsidiary of the Ithala Development Finance Corporation in KwaZulu-Natal, has been providing financial services to small and medium enterprises for over 30 years. The bank plays a vital role in supporting rural communities, school feeding cooperatives, and stokvels in areas where commercial banks are not present.
The Prudential Authority’s refusal to extend an exemption for Ithala to perform certain banking functions has put the bank at risk. The authority’s application for provisional liquidation aims to protect the interests of Ithala’s depositors by recovering and distributing their funds through insolvency legislation.
Hlabisa accused the authorities of a deliberate effort to consolidate major banks by collapsing black-owned institutions. He pledged to mobilize support for Ithala Bank and defend it against the threat of liquidation.
In addition to the Ithala Bank issue, the IFP also voiced its opposition to President Cyril Ramaphosa signing the Expropriation Bill into law without consulting coalition partners. The party criticized the bill for not adequately addressing historical injustices and raised concerns about its implications for the Ingonyama Trust, which supports the Zulu monarchy in KwaZulu-Natal.
The Ingonyama Trust oversees millions of hectares of land in the province on behalf of the king and traditional authorities. The IFP, a strong supporter of the monarchy, expressed reservations about the potential conflicts between the Expropriation Bill and the trust’s interests.
Overall, the IFP remains steadfast in its commitment to protecting the interests of Ithala Bank and advocating for just and equitable land reform that respects traditional institutions like the Ingonyama Trust.
