Qualifying depositors of Habib Overseas Bank (HOB), which is in curatorship are in line to be repaid R100 000 starting on June 12.
On March 26, the minister of finance on a recommendation from the Prudential Authority at the South African Reserve Bank (Sarb) placed HOB in curatorship to deal with its governance, compliance, and operational failures.
In a statement by Sarb yesterday, it said, “Since the commencement of the curatorship, in-depth investigations and analysis undertaken by the curator found that HOB’s financial position was significantly worse than initially anticipated.
“This resulted in a moratorium imposed and the closure of HOB branches by the curator to enable his team to undertake financial and operational assessments given the governance, compliance and operational failures.”
Sarb said that with the support of National Treasury it had sought to implement a mechanism whereby qualifying depositors of HOB could have access to and be repaid amounts deposited by them with HOB, up to a maximum of R100 000 per depositor.
These payments to depositors would be paid by Sarb ‒ based on a guarantee issued by National Treasury ‒ and not by HOB to assist depositors. Depositors with amounts in excess of R100 000 would retain a deposit with HOB for their remaining balances.
“This is, however, not certain nor guaranteed as the financial position of HOB is still being assessed,” the central bank said.
Sarb said it was decided to use FirstRand Bank’s retail and commercial bank division, First National Bank (FNB), as the pay-out institution to facilitate the repayment to depositors.
“The curator and FNB will provide the necessary information regarding access to the funds, and what will be required from depositors as well as the specific FNB branches to visit. Depositors will have up to three years within which to claim their funds pursuant to the mechanism being facilitated by Sarb through FNB,” it said.
All HOB branches are to remain closed.
“All customers who have loans with HOB are urged to continue paying their loans, as they are still legally obliged to do so. Customers may face penalties and other sanctions if they fail to repay monies owed to HOB,” Sarb warned.
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