The National Treasury has appointed First National Bank (FNB) to facilitate the Ithala Bank payouts.
The National Treasury says this is to ensure that funds are paid out in an orderly and secure manner as no payouts will be made at Ithala branches.
Over 250,000 Ithala customers have been unable to access their funds since January, following the Prudential Authority’s application to liquidate the institution due to technical insolvency.
Prudential Authority applied to the Pietermaritzburg High Court for Ithala’s provisional liquidation, stating the entity was technically and legally insolvent and unable to safeguard depositors’ funds.
The liquidation application comes after years of regulatory challenges at Ithala.
The National Treasury announced that it will make up to R2.2-billion available to repay Ithala depositors.
DETAILS ON PAYOUT METHODS AND HOW DEPOSITORS WILL BE NOTIFIED
The payout process will start on 8 December. FNB will make payments to any bank where the recipient is the primary account holder.
FNB will contact recipients via SMS, requesting verification details including their ID, proof of address, and proof of an alternate bank account for deposit.
Ithala recipients have until 2028 to claim their funds from this process.The payments will be processed within approximately two days after verification.
Depositors will first need to be verified to ensure payments go to the correct recipients and will transfer their funds to a bank of their choice.
The FNB branches in KwaZulu-Natal will be open from 7.30 am to 5pm to assist the Ithala depositors throughout this process.
An executive at FNB Corporate Affairs, Jacqui O’Sullivan, says the bank will make it easy for Ithala customers to access their funds through secure channels like eWallet, branches, and ATMs.
“Real financial inclusion requires customers to trust their banking channels, and we want to empower Ithala customers to claim back what is theirs and to have full faith in the safety and security of the process being offered to them.” said O’Sullivan.
Depositors with existing loans are still required to continue repaying their loans to the bank.
Treasury says it is working closely with the KwaZulu-Natal Government to ensure a smooth and secure process.
