CURATORSHIP
VBS bank was ‘in a precarious situation’
The curatorship of VBS Mutual Bank had brought to light matters the Reserve Bank was unaware of, deputy governor and registrar of banks Kuben Naidoo said. A commission of inquiry and a forensic investigation into the collapse of the bank were likely. There would be a call for public funds to be put into the bank by the end of the curatorship process, said Naidoo. Naidoo said in Parliament there was less cash in the bank than initially thought and the bank was in a "very fragile" and "precarious" situation. Governance and risk management practices were "inadequate and questionable" and the compliance function and culture was deficient. Furthermore, the bank had pursued an aggressive growth strategy for its balance sheet in the midst of funding challenges. The bank was placed under curatorship by the Reserve Bank on March 11 because of a liquidity crisis when municipalities wanted to withdraw funds. Treasury deputy director-general Ismail Momoniat said they were worried that the lack ...
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