KWAZULU-NATAL - Prudential Authority of the South African Reserve Bank applied for a provisional liquidation of the Ithala SOC Limited (Ithala) at the Pietermaritzburg High Court.
Subsequently, the accounts of clients at Ithala, which includes just over 65 000 (sixty five thousand) social assistance beneficiaries, were frozen. This includes beneficiaries of Old Age, Covid-19 SRD, Care Dependency, Child Support, Combination, Disability, Care Dependency and Foster Care Grants.
The National Treasury reached out to the Banking Association of South African (BASA) to find support from its members, in particular, for social grant beneficiaries. In turn, BASA contacted its member banks to identify one or more institutions capable of swiftly opening new accounts for all grant beneficiaries banking at Ithala. The National Treasury informed SASSA that in the interim, out of all the banks that were approached by BASA, First National Bank (FNB) offered emergency assistance to open accounts to facilitate payment for SASSA clients, who are currently banking at Ithala.
SASSA and FNB have successfully collaborated to ensure that all Ithala clients, who have not yet been able to open a new bank account, will receive an account with FNB in the interim until the clients are afforded an opportunity to provide SASSA with the details of their preferred bank. This process is estimated to conclude after 3 months.
It is important to note that SASSA is not advocating nor promoting FNB as a bank of choice for grant beneficiaries, however we appreciate their ability and willingness as a participant in the National Payment System (NPS) to step in to provide emergency assistance when another participant in the NPS is struggling. Over the course of the next 3 months all clients will have the choice to change to their preferred bank. SASSA will ensure that sufficient resources are available to support clients with this.
Upon opening accounts, FNB has thus communicated with SASSA beneficiaries to activate the opened accounts and collect bank cards from their nearest branches from 28 January to 04 February 2025. Clients will need a valid form of identity to collect their card. In addition, joint outreaches will be held by SASSA and FNB in more rural areas to limit the travelling inconvenience for clients in these areas.
The interim measure that we have entered into with FNB, will ensure that our clients continue to have access to their grant monies on time. Only, Covid-19 Social Relief of Distress (SRD 370) beneficiaries could be affected by this unexpected change. In terms of our processes, we anticipate that their January grant payments could be delayed. A special payment run will happen as soon as possible to remedy this.
SASSA would like to advise that the majority of its beneficiaries who banked with Ithala are in KwaZulu – Natal while there is a small fraction in Mpumalanga, Eastern Cape, Gauteng, Free State, North West and Western Cape.
Beneficiaries are urged to not panic during this period and note that SASSA is working closely with FNB and all the relevant stakeholders to ensure that all its beneficiaries will receive their grants as per the norm.
Source: SASSA
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