Ithala Customers Celebrate Access to Funds, But Say the Bank Still Owes Them More

For nearly a year, thousands of KwaZulu-Natal residents have lived with the anxiety of not knowing when or if, they would ever see their savings again. Now, with the provincial government and National Treasury confirming that refunds will finally begin this month, Ithala Bank customers are breathing a cautious sigh of relief.

But the celebrations come with a sharp edge: many want interest on the money that was trapped since January, and even more fear that Ithala’s future as a provincial financial institution may be coming to an end.

A Breakthrough After Months of Waiting

KwaZulu-Natal Premier Thami Ntuli broke the news on Monday, calling the agreement between the provincial government and National Treasury a “historic breakthrough”. Treasury is providing a R2.2 billion guarantee to unlock repayments and allow depositors to access their funds before Christmas a lifeline for families who’ve had to adjust their entire lives around the freeze.

For many, though, the announcement came with mixed emotions. Years of trust in Ithala, a bank rooted deeply in rural and township communities, had been shaken. And the sudden shutdown left people scrambling.

One furious customer told The Mercury:
“We are still angry… our money has been trapped. How would you feel? They must pay us interest on that money.”

Another depositor, nearly in tears, described the past months as “very difficult… this is the bank we survive on.”

Impact on Communities: “We Were Pushed to the Brink”

The freeze didn’t just affect individuals it shook essential services too.
The National School Nutrition Programme (NSNP), which relies on Ithala accounts to buy food for schoolchildren, said service providers were almost ruined.

Thabang Mncwabe of the NSNP summed up the mood:
“We cautiously welcome the announcement… but after so many misleading statements, we won’t celebrate yet.”

For many small suppliers, not having access to their own money meant empty storerooms, unpaid staff and strained community relationships.

On social media, the reaction was equally tense. While some welcomed the news, many questioned why an institution trusted by so many vulnerable communities had been allowed to collapse to this point.

Behind the Crisis: A Bank Without a Banking Licence

To understand what happened, you need to go back to a long-standing structural issue: Ithala has been operating without a banking licence, relying instead on an exemption granted by the Finance Minister.

When that exemption expired in early 2025, it exposed deeper solvency problems.
The Prudential Authority swooped in, filed for liquidation, and appointed a Repayment Administrator, Johan Kruger, to take charge of deposits.

Depositors were suddenly locked out and for nearly 12 months, stayed that way.

According to Treasury’s confirmation letter, the liquidation is still proceeding, and no court date has been set. This contradicts the optimistic tone of Premier Ntuli’s announcement, causing confusion among staff and customers alike.

A source inside the bank put it bluntly:
“The premier said one thing; Treasury says another. The case is still ongoing. Ithala is left with almost nothing.”

Is This the End of Ithala as We Know It?

ActionSA MP Alan Beesley echoed what many in the sector are thinking: the refund may be a victory for depositors, but the institution itself may not survive.

“Ithala’s days are limited,” Beesley said, arguing that a bank unable to accept or hold deposits can’t continue trading.

This is especially devastating considering Ithala’s mission: providing accessible financial services to rural communities historically ignored by mainstream banks. In parts of KZN, Ithala wasn’t just a bank, it was an anchor institution.

Customers Want Interest, But Will They Get It?

The biggest unresolved question remains whether customers will be compensated for the months their money sat untouched.

Depositors argue that they lost opportunities, fell behind on bills, and incurred debt because of the freeze. From their perspective, interest is not a luxury, it’s owed.

But so far, neither Treasury nor the provincial government has committed to paying interest. The priority right now, officials say, is simply getting people’s funds back into their hands.

The Road Ahead: Relief, Uncertainty, and a Community Still Hurting

While the long wait for access to cash may finally be ending, the Ithala saga is far from over. Communities are relieved, but not reassured. Employees are worried. Depositors feel cheated. And the provincial government is scrambling to save face after months of confusion and contradictory messaging.

For many in KwaZulu-Natal, Ithala wasn’t just a financial service, it symbolised independence, dignity and local empowerment. If it collapses, the ripple effects will be felt far beyond provincial borders.

For now, customers will get their money at last.
Whether they will get their interest or their bank back, remains to be seen.