South African bank set to be liquidated

The Reserve Bank has applied for an order to liquidate Ditsobotla Primary Savings and Credit Co-operative Bank Limited (DCB).

This comes after the bank was placed in resolution on 1 August 2025 after failing to meet its obligations. 

The bank was launched in November 2011 in Lichtenburg, Ditsobotla, North West, as the first black-owned Co-operative Bank.

According to the Reserve Bank, DCB had failed to meet regulatory requirements for an extended period, was operating at a loss and could not fulfil its financial obligations.

In addition, the bank’s governance, internal controls, systems, and risk management practices have proven inadequate.

Despite heightened supervision by the Prudential Authority (PA), DCB did not implement the corrective actions requested by the PA.

Since the bank was placed in resolution, the Reserve Bank and the resolution practitioner, Anoosh Rooplal, conducted in-depth assessments. They found that DCB’s financial position was significantly worse than previously reported by the bank’s management. 

The resolution practitioner concluded that DCB is insolvent and identified significant compliance, governance and operational failures.

Rooplal notified the Reserve Bank that there was no reasonable probability that the continuation of the resolution process would enable DCB to pay its debts and meet its obligations, or become a successful concern.

This is because DCB’s total assets are significantly less than its liabilities. Therefore, Rooplal believed that, given DCB’s current position, it is highly unlikely that the bank would be able to attract an alternative equity investor to recapitalise. 

He also highlighted serious concerns regarding DCB’s ability to operate effectively as a banking institution and has found its business model to be unsustainable.

This led the Reserve Bank to conclude that urgent liquidation would be in the best interest of DCB’s creditors, primarily its depositors. 

Liquidation would allow a liquidator to preserve the bank’s assets for the benefit of its creditors and, if necessary, allow for any investigations into the bank’s affairs.

Luckily, DCB’s depositors are not without recourse, as the Corporation for Deposit Insurance (CODI) has announced that qualifying depositors would receive payouts up to R100,000 per person.

This reimbursement process will continue despite DCB’s liquidation. This is because these payments are made by the CODI from the Deposit Insurance Fund, not by DCB. 

Depositors with balances exceeding R100,000 in their accounts will continue to have a claim against DCB in liquidation for the remaining amount after the R100,000 payment.