Collapse in Governance Pushes SARB to Shut Down Afrikaner Bank

Collapse in Governance Pushes SARB to Shut Down Afrikaner Bank

  • The South African Reserve Bank’s (SARB) Prudential Authority has taken steps to shut down Oranjekas
  • This comes after allegations of collapse in governance, financial mismanagement, and chronic non-compliance with regulatory requirements.
  • Oranjekas has until 12 August to file a convincing legal submission opposing the final liquidation

The South African Reserve Bank’s (SARB) Prudential Authority has moved to shut down Oranjekas, a Pretoria-based cooperative bank serving mainly Afrikaners. The regulator cited a collapse in governance, financial mismanagement, and persistent non-compliance with regulations. It said the bank’s condition had deteriorated beyond recovery.

his is after the bank was placed on provisional liquidation
The Oranjekas cooperative bank for Afrikaners in Pretoria is facing final liquidation. Image: GroblerduPreez/Getty Images
Source: Getty Images

Provisional liquidation

The Pretoria High Court placed the bank under provisional liquidation on 8 July 2025, with Acting Judge Mark Morgan appointing Zaheer Cassim as provisional liquidator. Oranjekas has until 12 August 2025 to file a convincing legal submission opposing the final liquidation, which will be heard on 16 September 2025.

In court papers, the Prudential Authority argued that Oranjekas is “factually and commercially insolvent,” unable to pay its debts, and beyond recovery despite repeated interventions since 2021. The regulator said the bank suffers from poor corporate governance, operational failures, and unreliable financial reporting, with previous auditors refusing to issue a going concern statement for 2024.

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Financial reports show that by February this year, the bank’s capital adequacy ratio had dropped to -49.8%, far below the minimum 6% requirement, while its solvency ratio was 67.22%, below the 100% minimum. Its delinquency rate stood at 18%, more than triple the allowable threshold, and deposits far exceeded the permitted ratio of total assets.

Failed rescue plans

The SARB said even direct oversight failed to halt the decline, accusing Oranjekas of obstructing meetings, failing to provide requested information, and experiencing mass board resignations. Attempts to keep financial operations afloat included a rejected request to accept a R30 million deposit on the condition that SARB promise not to take action against the bank for a year, something the Authority said was beyond its mandate.

Judge Morgan refused a bid to have the matter heard in private, ruling it must be argued in open court in line with constitutional principles.

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If the court grants a final winding-up order next month, Oranjekas will follow the path of other collapsed mutual banks such as VBS Mutual Bank, with members and depositors forced to recover their funds through the liquidation process.

Even attempts by the Reserve Bank to babysit the sinking ship could not work
The order came after the SA Reserve Bank’s (SARB) Prudential Authority (PA) approached the court for the liquidation of the bank. Image: LeRouxMinnaar/Getty Images
Source: Getty Images

South Africans weigh in

Social media shared their opinions regarding the liquidation.

@qothula said:

"Afrikaner bank or African Bank?"

@EvansRasemana said:

"Is this another VBS? Or ABS. Why is SA media not making noise like they did with VBS?"

@ZimiseleM440 said:

"Gayton won't be happy about this."

@zakheleGama said:

"Thank you SAReserveBank for taking action without fear, favour or prejudice. To those who accused the PA of targeting Ithala because it’s a bank for black people, I hope they change their views about the work of the PA & that they learn how things work without being emotional."

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Source: Briefly News

Authors:
Justin Williams avatar

Justin Williams (Editorial Assistant) Justin Williams is a multimedia journalist who recently completed his Bachelor of Arts (BA) degree in Film & Multimedia Production and English Literary Studies from the University of Cape Town. He is a former writer and chief editor at Right for Education Africa: South African chapter. You can contact Justin at justin.williams@briefly.co.za