NOORDWESTER – LICHTENBURG - The Minister of Finance has, in accordance with the Financial Sector Regulation Act 9 of 2017 (FSR Act) and on the recommendation of the South African Reserve Bank (SARB), placed Ditsobotla Primary Savings and Credit Co-operative Bank Limited (DCB) in resolution with effect from 1 August. The SARB has recommended the intervention to protect the interests of DCB’s depositors.
DCB has failed to meet regulatory requirements for an extended period, was operating at a loss and could not fulfil its financial obligations. In addition, the bank’s governance, internal controls, systems and risk management practices have proven to be inadequate. Despite heightened supervision by the Prudential Authority (PA), DCB did not implement the corrective actions requested by the PA.
A resolution practitioner has been appointed to oversee all business operations of DCB.
As part of the resolution process, all member accounts at DCB will be frozen temporarily. The SARB recognises that these measures may cause inconvenience to DCB members. It, however, emphasises that they are necessary to ensure an orderly resolution process and protect depositor funds.
As a registered bank, qualifying DCB depositors are protected by the Corporation for Deposit Insurance (CODI) and are covered up to R100 000 of their protected deposits. To further support an orderly resolution, the SARB is temporarily suspending all obligations DCB owes to its non-member creditors, as stipulated in section 166R(1)(d) of the FSR Act. This suspension will remain in effect until DCB’s financial position has been adequately assessed.
All members who have received loans from DCB must continue to repay them, as these obligations remain legally binding. Failure to make repayments on the money owed may result in penalties and other sanctions.
