The prospects of salvaging VBS Mutual Bank‚ which is under curatorship‚ have diminished and it is not clear that it can be saved‚ deputy Reserve Bank governor and Registrar of Banks Kuben Naidoo said in Parliament on Wednesday.
Naidoo gave an update on the state of the bank in a briefing to the standing committee on finance. He said the confidence that the bank could be salvaged was lower than when it was placed under curatorship — but this was not to say that it was zero.
VBS Mutual Bank was placed under curatorship in March when it faced liquidity challenges because it had accepted short-term deposits and made long-term loans. It had also relied too heavily on deposits from municipalities.
"Given what we know following two months of curatorship and preliminary investigations‚ the probability of salvaging this bank is lower‚" Naidoo said.