OUTA demands accountability over Treasury's R2.2bn payout for Ithala customers
OUTA has called for accountability after national treasury issued a R2.2bn guarantee to ensure the payout of Ithala customers.
Image: DOCTOR NGCOBO Independent Newspapers
The Organisation Undoing Tax Abuse (OUTA) is questioning the lack of accountability surrounding the R2.2 billion put forth by the national Treasury to enable payouts for Ithala SOC Ltd clients.
Last week, National Treasury announced it will provide up to R2.2 billion so that Ithala’s depositors can be repaid after the state-owned company fell into difficulty.
“The National Treasury, following consultations with the KwaZulu-Natal Provincial Government, will make up to R2.2 billion available to enable the repayment of depositors of Ithala SOC Limited (‘Ithala’),” Treasury said. The payout process starts on 8 December 2025, with deposits being paid within about two days after verification.
Ithala SOC Limited falls under the KwaZulu-Natal provincial government. Despite acting like a bank for years through the use of an exemption provided by the Finance Minister, Ithala did not obtain a banking licence.
When the exemption was not renewed in December 2023, the SA Reserve Bank's Prudential Authority (PA) appointed a repayment administrator as Ithala could no longer operate as a bank and its accounts were frozen.
The PA also filed a liquidation application but a date has not been set for it to be heard.
The Prudential Authority said the Treasury had previously agreed to provide a guarantee to help repay Ithala’s depositors. However, OUTA said that this guarantee never appeared in the national Budget or in the Medium-Term Budget Policy Statement (MTBPS).
It said the sudden move from a guarantee to a full R2.2 billion bailout suggests what OUTA calls “a last-minute scramble by National Treasury to fix another significant bank collapse debacle.”
OUTA said while it supports protecting depositors, it wants answers on why no one is being held responsible for Ithala’s failure.
“The ultimate question is: why do we not hear of consequence management and accountability for this mess?” OUTA asked.
The organisation said the entire R2.2 billion should come from KwaZulu-Natal’s equitable share and that cuts should come from non-essential budgets, not essential services.