Trade union the National Union of Mineworkers (NUM) says it is “shocked and surprised” by Reserve Bank governor Lesetja Kganyago’s decision to place Ubank under curatorship.
The union says this happened despite the Ubank’s board having committed on the night of May 16 that it would raise the required R800-million to save the bank from being placed under curatorship.
Ubank is a South African lender that primarily offers financial services to the families of gold and platinum miners.
"We were called last night by the Prudential Authority (PA) advising that we should raise R800-million. Of course that money was successfully raised within 24 hours. We are wondering why the PA decided to advise the Reserve Bank to take such a drastic decision,” says NUM general secretary William Mabapa.
On May 16, Reuters reported that Kganyago had said that, in the last two years, the central bank had increased scrutiny of Ubank owing to corporate governance issues, failure to diversify its business model and an inability to inject sufficient capital, besides other areas of concern.
"After having duly considered the seriousness of the issues facing the bank . . . the PA, has decided to place Ubank under curatorship with immediate effect," he said in a virtual briefing, Reuters reported.
Reuters explained that the central bank placing a bank under curatorship means it can appoint an independent administrator to take over the day-to-day operations of the bank from current management.
Reuters reported that KPMG South Africa had been appointed administrator of the bank, with Kganyago having assured the public that the lender would remain open for business and that it continues to be highly liquid.