In a show of solidarity, South African taxi associations have joined the national call to save the embattled Ithala Bank, highlighting its vital role in the economic and financial well-being of KwaZulu-Natal’s communities.
Taxi operators have voiced their concerns over the potential liquidation of the bank, which has historically provided accessible financial services to local businesses and individuals, particularly those marginalised by other financial institutions.
This follows the KwaZulu-Natal legislature’s Economic Development and Tourism Portfolio Committee’s decision to back Ithala Bank in its legal battle against liquidation, urging national parliament to intervene.
“The Prudential Authority’s decision to pursue liquidation undermines these efforts and the broader developmental role Ithala plays in the province,” the committee said.
“The aim of the intervention is to reach a resolution that protects the businesses and people of KwaZulu-Natal who rely on Ithala Bank for their financial and developmental needs.”
As several taxi associations across the country rally to help save bank from potential closure, Osizweni Taxi Association’s spokesperson, Nkosinathi Nala publicly expressed his concerns, highlighting the significant number of taxi operators who depend on Ithala Bank for financing and everyday banking services.
“I have a bank account at Ithala, and so do many taxi operators I know personally who are also customers of the bank. I received an SMS message saying I cannot withdraw and deposit. There is one taxi owner I know with R1 million deposited and others who bought vehicles financed by Ithala,” Nala revealed.
He explained that many taxi operators preferred Ithala due to its competitive interest rates for vehicle financing.
“Ithala offered taxi operators favourable financing terms including lower interest rates. We were happy that Ithala had a good relationship with the taxi industry including attending taxi events to speak to our members about different services and products they were offering our members.
“If Ithala financed for example a Toyota Quantum 16-seater, your total costs of ownership would not exceed R1 million compared to other banks or finance institutions,” he said.
Blame on politics and management
Nala attributed Ithala’s challenges to politics and poor management. “We are where we are because of politicians and management of the bank including the Reserve Bank itself,” he said.
He emphasised the urgency of resolving Ithala’s challenges to restore trust among depositors. “The bank’s existential challenges must be resolved as soon as possible for us to resume with our normal lives. This closure has made the bank high-risk—no depositor is going to put their money again in the bank that they don’t trust if this matter isn’t resolved soon.”
“Even if it reopens tomorrow, there will be a bank run. That means the bank will collapse as depositors rush to withdraw their savings and investments,” he warned.
Nala highlighted Ithala Bank’s significant role in addressing the needs of local communities in KwaZulu-Natal. “The bank has a long history in the banking sector. It is known for supporting those who were considered unbankable, providing access to loans, accepting deposits, and offering financial services for years without issues,” he said.
He reminisced about the bank’s role during Apartheid when it filled the gap left by other banks that excluded black customers. “Local businesses grew with Ithala. The bank spoke our language and remains part of our economic heritage. Its services were good, affordable, and accommodating. During Apartheid, when banks did not serve black customers, Ithala was there for us,” he added.
Ithala closure implications: bank clients will not lose their money
With Ithala closure looming – unless the government steps in to stop what the bank described as the “arrogant and callous” actions of the Prudential Authority, the move will see all its 253, 000 depositors impacted. This will result in the closure of depositors accounts to allow the pending court process to proceed.
Meanwhile, the government has assured all depositors, including SASSA grant recipients that their money will be protected and guaranteed amid the ongoing process to wind up. “What the Prudential Authority has done is to apply for the liquidation of Ithala Bank, and the implications of that is that it will wipe out the savings of the poor of the poorest,” Finance Minister Enoch Godongwana said in an interview with the SABC earlybin the week.
He added: “How the Bank Act define my role is that of a custodian of the depositors … so I’ve taken a view that I should protect those who made savings that are between R100,000 and lower. And we’ve made available a guarantee of about R2 billion rand to ensure that whatever happens to Ithala, their savings are protected.” — TaxiWorld.
