The SA Reserve Bank painted a grim picture yesterday that suggests as much as 75% of VBS Mutual Bank’s assets may have been stolen by its executives and directors, says a Business Day report. ‘It’s a travesty that the failure of management put so many depositors at risk,’ said SARB Governor Lesetja Kganyago.

‘Institutions such as banks rely on the governance processes, but when it’s the people responsible for the bank that are the ones perpetrating the crime, no amount of regulation can prevent that,’ he said. But the amount of money stolen relative to the bank’s total assets is difficult to establish, partly because the bank deliberately misled the regulator and also due to problems with the quality of its audit, which led the bank to withdraw its 2017 financial results.

Based on a balance sheet of about R2bn, and with the curator seeking to recover R1.5bn from the ‘perpetrators of the fraudulent scheme’, it seems possible that as much as 75% of the bank’s balance sheet has disappeared.

But there was relief for small depositors, with the Reserve Bank announcing that it has obtained a guarantee of R330m from the Treasury should it fall short in recovering the money owed to them. The bank announced that retail deposits – which include individuals, burial societies and stokvels – would be guaranteed to a maximum of R100 000 per customer.

This means that 97% of all depositors at the bank will be refunded their entire savings.

Full Business Day report

Kganyago claims the municipalities that were banking with VBS Mutual Bank knew they were breaking the law, says a Daily Dispatch report. ‘They knew they were breaking the law. These are the institutions who knew what they were doing. It (VBS) is a bank that serves the important segment of our society. It is a travesty that mismanagement at the bank put their deposits at risk. Management at the bank was determined to commit fraud.’

Full Daily Dispatch report (subscription needed)