The Reserve Bank has placed Ubank under curatorship. The Bank's governor Lesetja Kganyago said on Monday the decision was that it was being done because Ubank has run out of capital.

Ubank is popular in the mining sector for providing services to mineworkers and their families.

“During the last couple of years the prudential authority has intensified its supervision of Ubank due to… corporate governance concerns; secondly, a high number of internal controls weaknesses; and thirdly the prolonged period it has taken to ensure the injection of sufficient capital to comply with minimum capital requirements, diversify the bank’s business model and ensure the future sustainability of the bank,” said Kganyago.

“After having genuinely considered the seriousness of the issues affecting the bank and given that Ubank is unlikely to immediately meet its obligations as required by the Banks Act and the regulations relating to the bank, the minister of finance, in consultation with the Prudential Authority has decided to place Ubank under curatorship with immediate effect.”

Kganyago said placing Ubank under curatorship was a proactive step to prevent adverse consequences to Ubank’s depositors while also preserving the stability of SA’s banking and financial services sector.

KPMG SA has been appointed as a curator, with its director Zola Beseti as the accounting and auditing firm’s representative. Beseti’s first port of call will be to recover and take possession of all the assets of Ubank.

Kganyago said UBank will continue to operate during the period of curatorship and KMPG would make a decision regarding the continued granting of loans and sound banking activities.

He said retail depositors represent 98% of UBank's total liabilities.