SARB governor Lesetja Kganyago made the announcement at a press briefing on Sunday.
Mokgatlhe says the party is busy engaging with other political actors and civil-society groups to explore options on how they can collectively "exert maximum pressure on the South African reserve bank to reverse its decision". "The Financial Services Board has indicated that there are other related parties that may be impacted by the curatorship", said Treasury.
The Black Business Council (BBC) notes with serious concern events that culminated in the placing of VBS Mutual Bank (VBS) into curatorship by the South African Reserve Bank (SARB).
In August 2017, Treasury issued a circular informing municipalities not to make deposits into the mutual bank as this was prohibited by the Municipal Finance Management Act.
"The curator is given the legal means to create the necessary mechanisms to implement a resolution plan which will ensure the long-run sustainability of VBS. The recent example of African Bank which emerged as a stronger bank after curatorship should be noted", said Treasury.
"The Treasury and Reserve Bank conduct goes against radical economic transformation and must be condemned since it deviates from the objectives of transformation as articulated by 54th Congress to change the institutions and policies and laws in order to advance transformation", it said in a statement.
Being highly regulated entities, all banks needed to not only set aside large capital reserves, but take care not to break the law in all their activities, and hence fully comply with laws, such as the Public Finance Management Act (PFMA), the Municipal Finance Management Act (MFMA), and the Financial Intelligence Centre Act (Fica), the Treasury said.More news: Kittel sprints to 6th stage victory, Kwiatkowski keeps…
Kganyago said thay VBS experienced increasing liquidity challenges over the last 18 months emanating from a failure of the board of directors and executive management to manage the bank's rapid growth and its funding and liquidity position. The Treasury would engage with affected municipalities to determine the extent of their potential loss and ensure that service delivery was not affected.
Since late 2016, the Treasury had been working to try and find an orderly resolution to the problem of municipalities placing deposits in contravention of the MFMA. Kganyago dismissed rumours that the bank was being punished because it was black-owned, saying all banks were equally monitored. "If you apply for a banking licence and you are taking deposits you will be supervised in terms of the Banks Act, irrespective of who owns you", he said.
Cosatu said Sarb's decision is a "sharp reminder that the Reserve Bank as an institution has no appetite to see the financial sector transformed and that its lack of accountability remains poisonous for poor people and black businesses".
"The notion that the Reserve Bank chose to attack a black bank has to be condemned".
"National Treasury's actions are trying to balance the need for a more diversified small banking sector against the need for well-run and well-governed municipalities".
In 2016, the bank was thrust into the spotlight when it provided a R7.8 million ($660,000) loan to former president Jacob Zuma to reimburse the state for upgrades to his personal home - one of many scandals that plagued his administration.
The bank was fined R500 000 in 2017 because of weaknesses in its control measures to prevent money laundering and combating the financing of terrorism, Bloomberg reported.