Ditsobotla Primary Savings and Credit Co-operative Bank (DCB), a community-owned bank based in Lichtenburg in North West, has been placed in resolution, with all members’ accounts “temporarily” frozen.
Finance Minister Enoch Godongwana announced the move on 4 August, acting in terms of the Financial Sector Regulation Act and on the recommendation of the South African Reserve Bank (SARB). The resolution took effect from 1 August.
“The SARB has recommended the intervention to protect the interests of DCB’s depositors,” the central bank said. “DCB has failed to meet regulatory requirements for an extended period, was operating at a loss, and could not fulfil its financial obligations.”
According to the SARB, the bank has suffered substantial losses, failed to pay all its creditors, and breached legal capital and liquidity requirements. Governance, internal controls, and risk management were also found to be inadequate.
Despite “heightened supervision” by the Prudential Authority (PA), DCB did not implement corrective measures, such as diversifying its membership beyond the Ditsobotla Local Municipality (DLM) and providing governance training for staff.
A co-operative bank is owned and governed by its members, who share a common bond – such as living in the same area, working for the same employer, or belonging to the same association. Only members can use its services, and they participate in decision-making, such as electing the board. Unlike commercial banks, co-operative banks are not profit-driven; their goal is to meet the financial needs of their members.
DCB was officially registered with the SARB in March 2014 following the merger of three local savings and credit co-operatives – Aganang, Ikageng, and Itireleng – whose original members were employees of Alpha Cement, the Lichtenburg Municipality, and Lafarge Cement, respectively.
After registration, the common bond expanded to include all residents and employees of DLM, as well as those living in the broader Ngaka Modiri Molema District. Over time, employees of DLM became the majority of DCB’s membership. As of May 2025, DCB had 1 452 members and reported assets of R8.3 million (unaudited).
On its Facebook page, DCB likens itself to a credit union: “Unlike banks, credit unions are owned by the members they serve… profits can pay off for credit union members in the form of lower fees and higher savings rates.” The not-for-profit financial institution’s focus, it says, is on helping members access loans for homes or businesses, with returns benefiting the community that created them.
Moonstone requested DCB’s response to SARB’s claims that it failed to meet regulatory requirements, operated at a loss, had inadequate governance and controls, and did not implement corrective actions ordered by the PA. No response was received by the time of publication.
New resolution framework replaces curatorship
Until 1 June 2023, failed banks were placed under curatorship in terms of the Banks Act, where a curator managed the bank under the PA’s supervision. However, the Financial Sector Laws Amendment Act of 2021 introduced a new resolution framework, effective from 1 June 2023, shifting oversight to the SARB.
Under this framework, “resolution” refers to the management of a struggling institution’s affairs by the SARB when it is unable or likely unable to meet financial obligations, whether insolvent or not. The goal is to maintain financial stability and protect depositors through an orderly process.
When the SARB recommends resolution and the Minister of Finance agrees, the SARB gains full authority over the institution’s management, replacing boards and shareholders. It can convene creditor meetings, negotiate settlements, cancel or suspend agreements, halt legal actions, and appoint a resolution practitioner to oversee operations.
Protection for depositors
By law, all registered banks in South Africa – including DCB – are members of the Corporation for Deposit Insurance (CODI). This membership provides automatic deposit insurance of up to R100 000 per depositor, per bank, covering both the principal and accrued interest in qualifying products.
CODI, a subsidiary of the SARB, manages the Deposit Insurance Fund and will reimburse DCB’s qualifying depositors up to the R100 000 limit. This protection applies to individuals and non-financial corporates.
Read: CODI hits R20bn target in first year of operation
As part of SARB’s resolution strategy for DCB, qualifying depositors will be reimbursed. SNG Grant Thornton has been appointed as the resolution practitioner to oversee all business operations.
“With this appointment, DCB’s board of directors and management are relieved of their powers. These are now vested in the SARB,” the central bank said.
The resolution practitioner’s first priority is to verify depositors and confirm their balances so that payouts can be processed as quickly as possible. For DCB, CODI’s coverage extends to special savings accounts held by individuals and stokvels. CODI is also reviewing the bank’s records to identify any other products that may qualify for coverage under deposit insurance legislation.
The SARB has requested qualifying depositors to visit 50 Bree Street in Lichtenburg between 9am and 4pm on Thursday, 7 August, and Friday, 8 August, for verification.
They are required to bring:
- Proof of identity, such as a South African Identity Document, passport, or driver’s licence.
- Proof of address, such as a utility bill or lease agreement.
- An account confirmation letter from their alternative bank account.
Alternatively, depositors can submit their documents online by completing the form at https://bit.ly/Ditsobotla_rls25.
CODI will only transfer funds of up to R100 000 once the verification process has been successfully completed.
“The SARB will provide further guidance on how balances exceeding this limit will be handled.”
For assistance, DCB depositors can also email CODI at codi.payout@resbank.co.za.
Loan repayment must go on
While the resolution practitioner assesses the bank’s affairs, temporary restrictions on fund withdrawals will remain in place. However, members may still close their DCB accounts and transfer their funds to another bank of their choice.
The SARB noted that all members who have received loans from DCB must continue to repay them, because these obligations remain legally binding. Failure to make repayments on the money owed may result in penalties and other sanctions.
“Loan accounts will remain active, and members are expected to continue paying their regular monthly instalments in full. Missing any payments will result in the outstanding amount being added to the loan balance, which will then be reported as a default on the member’s credit record,” the central bank said.
