In a scathing response to months of financial turmoil, Ithala SOC Limited CEO Dr. Thulani Vilakazi has accused unnamed parties of attempting to “gut Ithala out of existence.” His remarks followed a Pietermaritzburg High Court ruling allowing the state-owned bank to resume operations and unfreeze all accounts.
The freeze, imposed without warning in January, brought banking activities to an abrupt halt. Vilakazi revealed he was not formally informed of the decision, leaving clients and employees in chaos. “An instruction came through that shut down one of our key platforms that host our ability to transact,” he said during a press briefing. “Suddenly, the screen goes off, and I, as the CEO, had not been notified.”
Clients Bear the Brunt
For many, the court ruling comes too late. Among those affected is 27-year-old Mhlengi Ngcobo, owner of Vela Villa in KwaDukuza, a hydroponic farm in KwaZulu-Natal. A loyal Ithala client since 2016, Ngcobo relied on the bank for his business operations. When accounts were frozen, he could no longer pay his 10 permanent staff, 15 seasonal workers, or 20 agricultural interns.
“Ithala resonated with young black business people trying to grow,” Ngcobo said. “But the damage has been done.” Though relieved by the court’s decision, he now questions whether he will continue banking with Ithala, citing “too many threats” for investors.
Regulatory Dispute Continues
The KwaZulu-Natal Economic Development Department claims the Prudential Authority’s decision to bar Ithala from taking deposits was based on a misinterpretation of the law. Officials argue that state institutions like Ithala should not require a commercial banking license, as they were never intended to be privatized.
While the court has allowed Ithala to restart its insurance division and non-deposit services, full operational recovery remains uncertain. The Prudential Authority has declined to comment as the legal battle continues.
For now, Ithala’s clients and employees hope for stability—but for many, like Ngcobo, the financial scars may take much longer to heal.
