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It is estimated that about 97% of the 22,700 retail depositors will receive all of their money
VBS Mutual Bank
On March 11, 2018, the Minister of Finance, on the recommendation of the former Registrar of Banks, placed VBS Mutual Bank (VBS) under guardianship. On that date, the South African Reserve Bank (SARB) announced that all retail deposits of up to R50,000 per retail depositor would be guaranteed by the government. However, to manage the severe cash stress at the mutual bank, daily limits were placed on how much depositors could access.
Today, we are pleased to announce mechanisms to reimburse eligible VBS retail depositors.
Following discussions with the Treasury, the government provided a guarantee to the SARB to facilitate the repayment of all retail deposits up to R $ 100,000 per depositor, effective Friday, July 13, 2018 Retail deposits are defined as individuals, funeral societies, stokvels and savings clubs, collectively referred to as retail depositors. The guarantee does not cover municipal or corporate deposits.
After considering several options, and based on specific criteria as to how we could allow retail depositors to access their funds, we decided to use Nedbank to facilitate repayment retail depositors. The selection criteria for a repayment method included the proximity of the depositors, the cost structure, the speed of execution, the complexity of having multiple media as well as the advice provided by the VBS curator. . We also looked for a payment institution offering specific types of products similar to those offered by VBS to its customers, in case VBS customers should choose to leave their deposits at the payment institution.
How VBS Retail Depositors Access Their Funds
The process by which retail depositors can access their funds will commence on Friday, July 13, 2018 and will be as follows:
1. Retail depositors may visit any Nedbank branch as of July 13, 2018.
2. Retail depositors will be required to present their South African identity document or other accepted form of identification (eg a South African pbadport) and proof of address. Nedbank will also use a biometric system linked to the Ministry of the Interior to verify the identity of the depositors.
3. Retail depositors will be asked to sign an agreement badigning their rights to their claim in VBS to the SARB up to an amount of R 100 000 of their deposit. This is to ensure that depositors understand that once they have received their deposits through Nedbank, they no longer have rights to the same deposit as the other. they had with VBS.
4. Nedbank will open an account for each person or party and charge this account with a balance equal to the amount of the guaranteed deposit at VBS. Each individual account holder will receive a new credit card. Stokvels, funeral societies and savings clubs will not receive cards and will have to make transactions in Nedbank branches.
5. Retail depositors will have three years to claim their deposits.
Retail depositors will be able to access their money as of July 13, 2018. The limitation of R1,000 per day will no longer apply as at VBS. Once the depositors have gotten their new Nedbank card
they can choose to leave their money in their new Nedbank account, withdraw all or part of the funds in any Nedbank branch or branch or transfer the money. Money on another bank account. any bank in South Africa. In addition, retail depositors can use their new Nedbank cards to make payments in any retail store.
Retail depositors' funds in their new Nedbank accounts will be secure and accessible for three years, without haste for people. withdraw their funds. We call for patience as the infrastructure of the Nedbank branches in Limpopo will be under pressure if everyone tries to access their funds from the first day. Even though retail depositors will have access to their full balances, for security reasons, individual depositors are asked not to withdraw large amounts of cash but to keep their money in their new Nedbank account or to transfer it to another bank. .
In order to facilitate the transfer of personal and account data from VBS to Nedbank, VBS Branches will not be able to provide cash withdrawal services from the beginning of the activity on Tuesday July 10, 2018. VBS branches will remain open to inquiries, customer education and loan repayments. Retail depositors, however, will not be able to access their funds, not even the R1 000 per person per day, nor the burial, as is currently the case.
Retail depositors or account holders who have more than 100,000 rand deposited in VBS will only be able to access their deposits up to a maximum of R 100,000 through their intermediaries. new Nedbank accounts. Amounts over 100,000 rand will remain as deposits in VBS. These deposits will remain valid and depositors may receive a portion of their amounts in excess of R100 000 in the future, depending on the successful recovery of loans and other badets due to VBS. This is however not certain nor guaranteed.
It is estimated that about 97% of the 22,700 VBS retail depositors will receive all of their money. We are aware that some retail depositors have larger amounts deposited in VBS. In collaboration with the Conservative, the SARB and Prudential Authority will continue to work to recover as much money as possible from VBS.
Municipalities, large corporations, and other business depositors will not receive any of their funds at this stage because they are not guaranteed, but will keep their deposits in VBS.
As curatorship continues, the emphasis will be on recovering funds from VBS. We urge all clients who have loans with VBS to continue to pay their loans because they are still legally obliged to do so. People may face penalties and other penalties if they fail to repay the amounts due to VBS. VBS customers are requested to continue using the VBS infrastructure and branches to repay their loans.
Forensic Investigation
The media has largely covered the VBS in recent weeks. In this regard, we wish to say the following:
1. The forensic investigation conducted by attorney Terry Motau, SC, on possible frauds and malfeasance at VBS is still ongoing. We expect that the survey will be completed by the end of August or early September 2018.
2. The first results of the investigation were made available to the registrar by the SARB. The conservative used these preliminary findings of the investigation to initiate urgent requests to take action to recover the amounts owed to VBS. This took place on Friday, July 6, 2018. This was a necessary action required by the Conservative to prevent the dissipation of property belonging to the VBS.
3. In due course, the evidence documented by the investigator will be turned over to law enforcement and the South African Revenue Service.
In the Conservative's opinion, the 2017 financial statements of VBS did not accurately reflect the financial position of the bank and are therefore restated. This process should take a few more months. It is only after this process is completed that we will be able to definitively evaluate the actual financial situation of VBS and the future of the mutual bank. Likewise, until these financial statements have been reissued, it is difficult to badess the amount of funds that can be recovered and the proportion of funds from other depositors that may be recovered.
The SARB wishes to thank the curator for his work so far. This has been a difficult curator and the announcement today detailing retail depositors' repayment mechanisms will make his job easier, even as his work continues. SARB would also like to thank Nedbank for agreeing to partner with SARB to facilitate the return of retail depositors' funds. Repayment of retail depositors will help alleviate the suffering of many people over the past four months.
We thank stakeholders for their cooperation and patience with curatorship and we ask VBS customers to stay patient. We would like to point out that retail depositors will have access to all their funds in the Nedbank branches up to 100,000 rand per depositor, as of Friday 13 July 2018. We call on people not to rush to claim their
Statement issued by SARB Media Relations, July 9, 2018
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