Ubank, a South African bank that mainly targets blue-collar workers and those in the mining sector, has been placed under curatorship by the South African Reserve Bank.
This comes after concerns about the bank’s capital adequacy, weak corporate governance, as well as lack of corporate internal controls.
KPMG South Africa has been assigned as the curator, with KPMG director Zola Beseti as the representative, according to News24. This means that KPMG will now oversee and manage Ubank’s business side of things. However, ownership in the bank remains in a trust managed by trustees elected by the National Union of Mine Workers (NUM) and the Minerals Council of SA.
“KPMG South Africa will be responsible for Ubank with immediate effect,” SA Reserve Bank governor Lesetja Kganyago said.
Kganyago emphasised that the bank will remain open for business despite this. He said that Ubank only has a capital adequacy rate of 3%, while it should be closer to 20%. Retail depositors represent 98% of Ubank’s total liabilities.
Ubank was previously known as Teba bank and it was granted a banking licence in 2000. It grew out of Teba Cash Financial Services, which had been providing financial services to mineworkers since 1975.
NUM has expressed that is it “highly shocked and surprised” by the announcement that the bank is being put under curatorship.
“This happened despite the Ubank’s board commitment [on Sunday] night that it will raise the required R800 million to save the bank from being placed under curatorship,” the union said in a statement.
“The Ubank board managed to raise the required money and the NUM is shocked by this latest development,” it said.
By Zintle Nkohla
Follow Zintle Nkohla on Twitter
Follow IT News Africa on Twitter