Africa-Press – South-Africa. FNB has paid out over R1.65 billion to Ithala SOC customers, four months after the massive payout scheme was put into motion.
This represents around 75% of the initial payout target, but reportedly accounts for only 32% of Ithala’s total customer base. Depositors have until 2028 to claim their funds.
The National Treasury first announced the R2.2 billion repayment plan to Ithala’s depositors on 2 December 2025, with the actual payout process beginning six days later.
In an interview with Newzroom Afrika, KwaZulu-Natal (KZN) Premier Thami Ntuli said certain depositors had not been given preferential treatment over others.
When asked whether the payout process had prioritised higher-value individuals over those from lower-income households, Ntuli said he was not in a position to suggest as such.
“The payments that have been made to the depositors were not selective as to who would be paid first,” Ntuli said. “The Treasury made a guarantee of R2.2 billion, which equates to the depositors’ value.”
“It’s a process, not an event, for the depositors to access their money. By the end of March, that was the report we received, which does not mean there are depositors who are not allowed to withdraw their money.”
Ntuli said it is difficult to give an estimation on a timeline for the completion of the payout process, but said the KZN provincial government hopes to complete the process as soon as possible.
He explained this was due to difficulties arising from a number of factors, such as having to pay out beneficiaries of Ithala customers who have since passed away.
Ntuli also noted that he was working with the KZN Executive Provincial Council to create a business model that will encourage customers to continue banking with Ithala.
“At the centre of what Ithala was meant to do was to help those communities which were at a disadvantage,” Ntuli said.
“We want a model that will actually take care of those communities and those customers who are based in a disadvantaged environment.”
The KwaZulu-Natal provincial government previously announced a R300 million rescue package for Ithala in September 2025, aimed at stabilising operations and covering costs such as employee salaries.
Ithala’s continued failure
KwaZulu-Natal Premier Thami Ntuli
Ithala’s tenure has been rife with mismanagement of depositor funds and a consistent failure to comply with South Africa’s banking regulations.
Ithala does not hold a banking licence, but has been operating under exemption from the Minister of Finance and the Prudential Authority to allow it to take deposits.
This exemption was intended to give Ithala enough time to comply with regulations to acquire a banking licence. After multiple extensions were granted, the exemption ended in December 2023 with Ithala failing to secure a licence.
As a result, the Prudential Authority applied to have the company liquidated in order to recover depositor funds and protect future depositors from losing money with the company.
A Repayment Administrator (RA) was appointed to recover depositor funds, while an independent investigation into Ithala’s operations found the company to be technically insolvent.
All of Ithala’s depositor accounts were subsequently frozen, meaning the company could no longer receive deposits into these accounts or make payments from them.
This was done in order to prevent large numbers of depositors from withdrawing their money all at once, which would risk institutional collapse on Ithala.
The Prudential Authority’s liquidation request was withdrawn earlier this year, which Ntuli described as an important step in enabling Ithala to restructure its operations.
“We want to see the RA moving out of Ithala SOC so that we can begin a process to reposition and restabilise [the company],” Ntuli said.
“That will trigger processes that will lead to the application of a banking licence. It’s a process that will require some work to be done.”
The Organisation Undoing Tax Abuse (OUTA) has been critical of the government payout plan, calling for proper transparency and accountability of those involved in the company’s failure.
When the payout plan was announced, OUTA said that the R2.2 billion guarantee should ideally be paid out from non-essential provincial services.
OUTA previously laid a criminal complaint against Ithala’s parent company in 2017, over a R50 million loan which was never repaid. The complaint was allegedly never followed up on by the South African Police Service.
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