The South African Reserve Bank SARB has filed for the liquidation of the Ditsobotla Primary Savings and Credit Co-operative Bank Limited DCB, a move it states is necessary to protect the institutions depositors and creditors.
This legal action, scheduled for a hearing on 29 August, follows the banks failure to meet critical financial obligations and implement corrective measures, despite being placed under resolution earlier this month. The SARB asserts that liquidation is the only way to protect the banks 1 452 members and creditors, with deposit insurance guarantees ensuring most clients will recover savings up to R100 000.
The Lichtenburg-based bank, which served a specific geographic common bond in the Ngaka Modiri Molema District of the North West province, was placed into resolution on 1 August after it failed to meet its legal liquidity requirements. Although it could pay its creditors, the SARB found its governance, internal controls and operational practices were a huge risk for depositors.
