SARB to shut down South African bank

The hearing is scheduled for 29 August 2025 and follows a decision by the Minister of Finance, based on the SARB’s recommendation to place DCB in resolution earlier this month. 

DCB is based in Lichtenburg, which sits in the Ditsobotla Local Municipality (DLM) in the North West. 

Its membership is defined by a geographical common bond, with that anyone in the broader Ngaka Modiri Molema District allowed to join. 

The bank was created through the merger of the savings and credit co-operatives Aganang, Ikageng and Itireleng, whose original customers were employees of Alpha Cement, the Lichtenburg Municipality and Lafarge Cement, respectively. 

It was officially registered with the SARB in March 2014. As of May 2025, DCB had 1,452 members and reported unaudited total assets amounting to R8.3 million. 

DCB was placed in resolution on 1 August 2025 after failing to meet its obligations. Although the bank could pay its creditors, it was unable to meet its legal capacity and liquidity requirements. 

The SARB also believed that DBC’s governance, internal controls and operational practices were found to be inadequate and risky for depositors. 

DBC failed to implement necessary corrective actions despite heightened supervision and recommendations by the Prudential Authority. The actions included: 

Despite heightened supervision and recommendations by the PA, DCB failed to implement the necessary corrective actions, which included: 

• Diversifying the bank’s membership portfolio to reduce reliance on DLM and address concentration risk
• Ensuring that all governance structures and staff undergo training to properly manage DCB’s risks.

Since being placed under resolution, the SARB and the resolution practitioner conducted in-depth assessments and found that DCB’s financial position was far worse than the bank’s management reported. 

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

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

DCB’s total assets are significantly less than its liabilities. The resolution practitioner believes that it is doubtful that the bank could attract an alternative equity investor to recapitalise. 

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

The SARB has concluded that urgent liquidation would be in the best interest of DCB’s creditors, primarily its depositors.

The central bank added that the decision will 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.

Customers can get money out 

The SARB previously announced that qualifying depositors of DCB would receive payouts up to R100,000 per qualifying depositor as per its resolution strategy for DCB.

This reimbursement process will continue despite the possible DCB liquidation. 

The payments, which can reach up to R100,000 per qualifying depositor, are made by the Corporation for Deposit Insurance (CODI) from the Deposit Insurance Fund, and not by DCB. 

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

Issued on BusinessTech by Luke Fraser | https://businesstech.co.za/news/banking/835739/sarb-to-shut-down-south-african-bank/