The KwaZulu-Natal government says it is making progress in repaying depositors affected by the ongoing crisis at Ithala Bank, with just over 30% of clients having received payments totalling more than R1.6 billion.
KwaZulu-Natal Premier Thami Ntuli confirmed the payouts during a recent interview. He stated that the payments, which followed a National Treasury intervention late last year unlocking funds for reimbursements, are not selective and do not prioritise any particular group of depositors.
According to Premier Ntuli, the National Treasury made available a guarantee of R2.2 billion, which matches the total value of deposits. He emphasised that the repayment process is not a single event but an ongoing one. By the end of March, the reported figure stood at just over 30% of clients paid, though this does not prevent other depositors from accessing their funds when invited.
The Premier clarified that there has been no preferential treatment for higher-value clients over smaller depositors, such as members of stokvels or low-income individuals. Payments are managed in partnership with FNB, with depositors receiving SMS notifications and then visiting FNB branches to withdraw their money. Due to the large number of depositors — more than 200,000 — the process involves targeting specific groups at a time rather than handling everyone simultaneously.
When asked about a timeline for full repayment, Premier Ntuli said the government wishes for the earliest possible access to funds for all affected clients. However, he noted that the nature of Ithala’s customer base, including normal depositors and beneficiaries of estates, makes it difficult to commit to an exact schedule. He stressed that the process is transparent and that the government cannot provide a precise projection at this stage, while acknowledging the vulnerability of many waiting clients.
The crisis at Ithala Bank dates back to 2023, when the institution lost its ability to accept deposits and faced threats of liquidation. A recent court ruling has since cleared the way for the bank to resume its core operations.
Premier Ntuli addressed the issue of Ithala’s banking licence, explaining that the bank had previously operated under an exemption rather than holding a full licence. The provincial executive council has decided to review the board and implement consequence management for members of the executive and staff, while supporting the Special Investigating Unit (SIU) in its ongoing probe. The liquidation application has been withdrawn, and the government intends for the Repayment Administrator to exit so that Ithala can be repositioned and restabilised. This will eventually include applying for a full banking licence, though the Premier described it as a process that will take time and require significant work.
The Premier expressed hope that Ithala can be preserved because of its role in serving disadvantaged communities who often struggle to access finance from commercial banks. He said the bank has historically supported people in starting businesses, building houses in rural areas, and purchasing vehicles.
“We want a model that will actually take care of those communities, those customers who are based in a disadvantaged environment,” Premier Ntuli said. He added that without Ithala, these customers would be left vulnerable and without access to the kind of support they need.
The KwaZulu-Natal government is considering options for a turnaround model that maintains Ithala’s original focus on empowering disadvantaged communities and restoring public trust through stability and accountability.
At present, thousands of depositors remain affected, and the full repayment process continues without a confirmed completion date.