Situation at VBS Bank much worse than we thought, says SARB's Kuben Naidoo | Fin24
 
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Situation at VBS Bank much worse than we thought, says SARB's Kuben Naidoo

May 29 2018 10:20
Sibongile Khumalo

Kuben Naidoo, Reserve Bank deputy governor, told a media briefing on Tuesday the financial situation of VBS was "much worst than we thought".

He said at the briefing on the release of the Bank Supervision Department annual report that the SARB had put in place very tough measures to protect the depositors' interests. "We have applied a forensic investigation to asses whether there are cases of fraud in the the bank. That investigation is still underway."

He said this was likely to take two or three months more.

"It is our intention to continue with the curatorship." According to Naidoo, there was still a probability that the bank could be saved, but that probability was slightly lower.

"We are working towards trying to save the bank, whether we are able to save the bank will depend on whether we are able to recover sufficient funds to pay back depositors, and where the bank is a viable business model, with systems in place to sustain the bank."

"[For] now we are trying to investigate whether there was fraud in the bank, whether there were factitious deposits and loans to related  parties that were not disclosed to the regulator," Naidoo added.

The annual report showed that the SARB imposed a total of R77.5m in administrative fines to VBS and China Construction bank for failure to comply with the Financial Intelligence Act. 

The banks were penalised for "not identifying and verifying their customers' details, not keeping records of customer identification, inadequate controls and working methods pertaining to the reporting of suspicions transactions".

The heaviest fine of R75m was given to the Johannesburg branch of China Construction Bank Corporation -  R20m was suspended for a period of three years.

VBS which made headlines in 2016 when it granted former president Jacob Zuma a R7.9m loan for his Nkandla home, was fined R2.5m, of which R2m was suspended for a year.

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sarb  |  vbs  |  banks
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