‘Finally, Our Money Is Coming’: Treasury Steps In With R2.2bn Guarantee for Ithala Depositors

After nearly a year of uncertainty, thousands of KZN depositors can finally breathe again

For almost a year, Ithala SOC Limited’s customers have lived in financial limbo, some unable to pay school fees, others struggling with rent or everyday expenses because their life savings were locked away. This week, a much-needed lifeline arrived: the National Treasury has stepped in with a R2.2 billion guarantee to make sure depositors finally get their money back.

The announcement, made after consultations with the KwaZulu-Natal Provincial Government, marks a dramatic turning point in what has become one of the most painful banking sagas in recent provincial memory.

How We Got Here: A Bank in Trouble, A Community in Crisis

Ithala is not just any financial institution, especially in KZN. For decades, it has been seen as a homegrown bank with deep ties to local communities, small business owners, and civil servants. When news broke in January 2025 that the Prudential Authority had applied to liquidate the bank over solvency issues and regulatory breaches, alarm bells rang across the province.

Since then, ordinary depositors, many from rural towns or township areas, have been unable to access their own funds. The liquidation case is still pending, with no court date set.

The silence and uncertainty created months of frustration, sparking WhatsApp group speculation, fear of a total collapse, and social media pressure demanding government intervention.

As one Pietermaritzburg resident posted on Facebook:
“My mother’s pension is in Ithala. We’ve been waiting since January. This is the first real progress we’ve seen.”

Treasury Steps In: What Happens Next?

According to National Treasury, the R2.2 billion guarantee is specifically intended to pay back depositors, not rescue the bank itself.

The payout process will officially begin 8 December 2025, but not before verification.

How verification will work:

• Depositors will first receive an SMS from First National Bank (FNB)

• They must bring:

  • A valid ID

  • Proof of address

  • Proof of an existing alternate bank account

• Only after receiving the SMS may they visit any FNB branch

• Once verified, payments will be made within two days

Deposit holders will have until 2028 to claim their money.

FNB has been appointed as the payout bank to ensure the process is controlled, safe, and free from the chaos that could arise if thousands of desperate customers arrived unannounced.

And What About Loans?

While many depositors are focused on recovering what they lost, Treasury made one point crystal clear:
Loan holders still need to repay their loans.

Repayments must continue to a dedicated Absa account (Account No. 4067762302).
This decision aims to prevent further financial instability around the already troubled institution.

Public Reaction: Relief, Skepticism, and a Bit of “About Time”

The announcement has triggered mixed, but mostly relieved reactions across KwaZulu-Natal.

On TikTok, one user joked:
“Ithala depositors queueing at FNB on the 8th like it’s Black Friday.”

Others, however, criticised government for stepping in too late:
“Ten months without access to your own money? That’s traumatic. We can’t ever let this happen again.”

Some financial analysts have expressed concern about the long-term implications, questioning whether taxpayers will ultimately absorb the cost. But for everyday customers, the priority is simple: getting their money back safely.

What This Moment Reveals About Banking Trust in SA

The Ithala saga has become a cautionary tale about financial oversight, communication, and the importance of protecting vulnerable depositors.

It also highlights a deeper issue: many South Africans still rely on smaller, community-oriented institutions because they feel overlooked or underserved by major banks. When those institutions fail, the blow is personal.

Treasury’s guarantee is a victory for depositors, but also a reminder of how fragile trust becomes when savings are locked away by corporate or regulatory battles.

For Now, The Long Wait Is Almost Over

With the payout process finally set in motion, thousands of families across KZN can start planning again. It won’t erase months of stress, but it brings long-awaited closure.

And perhaps, by 2028, the province will look back at this episode not only with relief, but with lessons learned about protecting ordinary people from financial harm.

{Source: IOL}

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