VBS Mutual Bank.
VBS Mutual Bank.

The situation at Nedbank branches in Thohoyandou and Makhado in Limpopo had stabilised by 10.30am on Friday as VBS Mutual Bank depositors rushed to open accounts so they could withdraw money.

The South African Reserve Bank announced earlier in the week that R330m had been given to Nedbank to pay VBS customers affected by the collapse of the bank.

Each customer will be allowed to withdraw a maximum of R100‚000. There are currently 22‚700 retail VBS depositors who stand to benefit.

The Reserve Bank put VBS under curatorship in April after discovering that the bank did not have enough funds to meet its obligations to depositors. On Monday the Reserve Bank suggested that as much as 75% of VBS’s assets may have been stolen by its executives and directors.

It is the same bank that gave former president Jacob Zuma a R7.8m loan to repay the state for upgrades made to his home at Nkandla.

“We have had significant queues of VBS depositors early this morning who came to open their Nedbank accounts‚” said Nedbank’s David Schwegmann in Thohoyandou on Friday‚ where he was monitoring the process.

He said it was too early to tell how many VBS depositors had visited three Nedbank branches and satellite points at Boxer stores in the two towns.

While depositors queued to get their money‚ new details emerged on Friday about a shelf company‚ Robvet‚ with links to VBS that was allegedly used to pay R250,000 for an “ANC gala dinner event” in January.

The Mail & Guardian reported that VBS curator Anoosh Rooplal disclosed in court papers that since early 2016‚ the Robvet account had been used to pay “commissions” to third parties who assisted VBS in raising deposits from municipalities.

The newspaper reported that Rooplal had applied to the court to sequestrate Vele Investments chair and former VBS operations chief Robert Madzonga‚ along with other senior officials at the bank in an attempt to recover funds.

The Sunday Times reported in June that money looted from VBS had been used to shower Venda king Toni Ramabulana with gifts worth almost R12m‚ including a R7.8m house at Dainfern Golf Estate in Johannesburg‚ a R1.1m Range Rover Sport‚ a R1.5m BMW 750Li and a R1.3m Mercedes-Benz Viano.

Relief for customers

Earlier on Friday, VBS customer Azwindini Makhokha expressed his relief on live television‚ even though he could not withdraw all of his savings.

"I’m here at Nedbank to withdraw R100‚000 because I’ve got R115‚000 in the bank, so today I’m very very happy. Everybody is smiling today because‚ hey‚ we suffered a lot‚ sleeping in the queues‚ everything‚" he told eNCA’s Zikhona Tshona.

People were lining up from as early as 4am in Thohoyandou‚ according to SABC’s Rudzani Tshivhase.

A member of Magiabila Family Society‚ one of the investors in the troubled bank‚ told the Sowetan he was relieved that Friday marked the start of a process of giving them access to their funds‚ after a period of confusion and frustration.

"Since the South African Reserve Bank made an announcement this week‚ people are no longer sleeping outside the bank in Thohoyandou. We are happy our government has intervened with immediate effect to save our money."

VBS is under curatorship for the safety of depositors.

In a recent notice‚ the curatorship team — anticipating the surge of customers at bank branches — assured deposit holders: "You don’t have to rush to Nedbank to withdraw your money‚ as your money is safe."

The curators said to access their funds‚ individuals had to visit their closest Nedbank branch with a valid identity document and proof of residency not older than three months.

"Nedbank was chosen to receive all VBS Mutual Bank transactional accounts because of its branch location‚ capacity‚ systems‚ manpower and most relevant product offering and product pricing‚" the team said.

Explaining the limit on withdrawals‚ the curators said: "Customers are guaranteed up to R100‚000 of their available balance. Customers wishing to withdraw above the R100‚000 guaranteed limit of funds currently available in their accounts‚ will not be able to do so as the limit set by the Treasury is R100‚000."

Those with extra savings will have to adopt a wait and see position — which is not what ordinary people like Sophie Mulaudzi want to hear. She told eNCA of her frustration on Friday‚ saying she had saved over R300‚000 with the bank over many years — and wanted to get it back.

The curators said: "The excess monies over the R100‚000 guarantee will remain with VBS Mutual Bank and depositors will not have access to these funds until further notice. [We] will continue to pursue assets for the benefit of the relevant creditors. Recovered monies will be disbursed to retail customers who hold more than R100‚000‚ alongside with trade creditors and corporate depositors."

The curators "will update these depositors and creditors as and when appropriate".

Anyone owing money to VBS must keep paying. "All loan account contracts remain with VBS Mutual Bank and are enforceable‚" said the curatorship team.

Business Day reported that the South African Reserve Bank has suggested that as much as 75% of VBS Mutual Bank’s assets may have been stolen by its executives and directors.

"It’s a travesty that the failure of management put so many depositors at risk‚" said Reserve Bank governor Lesetja Kganyago.

The report noted that the bank’s failure may yet have grave consequences for municipalities in some of the poorest parts of the country‚ which stand to lose almost all of the R1.6bn they deposited with VBS‚ increasing the risk of budget shortfalls and violent protests that could result from a lack of service delivery.

With Staff Writer