Court ruling revives Ithala Bank operations, bringing relief to employees and clients

MORE than 380 Ithala Bank employees across 38 branches in KwaZulu-Natal are celebrating after a Pietermaritzburg High Court decision allowed the black-owned financial institution to resume operations. 

Judge Muzi Ncube ruled that Johannes Kruger, the Repayment Administrator appointed by the Prudential Authority (PA), had no legal right to assume control of the bank’s daily operations. 

This ruling comes as Ithala, which has more than 200000 active clients, appeals an ongoing liquidation application brought by the PA, which led to the freezing of all bank accounts, earlier this year.

Sibusiso Mkhize, an employee at the KwaMnyandu Mall branch in uMlazi, south of Durban, expressed his relief at returning to work. “I’m just happy to be working again,” said Mkhize. “We’re hopeful the matter will be resolved quickly so we can have clarity about our future. For now, I’m just grateful.”

Mkhize also extended thanks to community members, political parties, and advocacy groups that supported efforts to save the bank. 

Samuel Mathe, who works at the Pietermaritzburg branch, said:  

“We thank everyone who is fighting to save the bank. We desperately need these jobs as Ithala Bank employees. We just hope and pray that our jobs are protected. No one wants to be unemployed in these difficult financial times,” said Mathe.   

He added: “We are grateful to those fighting for the survival of the bank. Our jobs mean everything, especially during these tough economic times.” 

KwaZulu-Natal Premier Thamsanqa Ntuli welcomed the judgment, calling it a lifeline for thousands of clients, employees, and suppliers. “On behalf of the provincial government, we are pleased with the High Court's ruling. This brings much-needed relief to those who’ve suffered due to halted transactions under the Administrator’s order.”

The case was heard on March 17, and the judgment was handed down on May 9. The bank will now continue operations while its legal appeal proceeds.

In court papers, the PA claims Ithala is technically and legally insolvent under section 83(3)(b) of the Banks Act because of its failure to comply with directives to repay deposits. Ithala is challenging this assertion in court.  

Major political parties, including the IFP, ANC, EFF and uMkhonto weSizwe Party (MKP) have thrown their weights behind the bank.

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