The South African Reserve Bank (SARB) has urged those with loans at the Ditsobotla Primary Savings and Credit Co-operative Bank in Lichtenburg, North West, to continue to pay their debt.
The institution was placed under the bank in resolution, which means that the Reserve Bank has taken over its affairs.
The bank experienced substantial losses over the past year, could not pay its creditors, and failed to meet liquidity requirements.
They also did not implement corrective actions such as diversifying their membership portfolio to reduce their reliance on employees of the cash-strapped Ditsobotla Local Municipality.
Although funds cannot be withdrawn at the moment, Chief Executive Officer of Corporation for Deposit Insurance, Sabihah Mohamed says members should not default on loan repayments.
“If you have a loan with the bank, you have continuing paying your loan because that legal obligation remains in place, so yes, you have to continue paying the loan, the loan amount decreases as you pay it off and at some point, the resolution practitioner will advise as to what is the way forward,” says Mohamed.
