The payout process for Ithala depositors is set to continue well into 2026, with customers having up to three years to claim their funds from First National Bank branches.
So far, just over R1 billion – almost half of the R2.2bn allocated by National Treasury – has been disbursed within 29 days of the process going live on 8 December 2025.
Read: Relief at last: Ithala depositors can access frozen funds from 8 December
FNB told Moonstone that Ithala depositors will have up to three years to collect their payouts from FNB branches.
“The bank continues to work tirelessly to make the payouts process as simple as possible for Ithala customers and remains committed to completing this process as soon as possible.”
The R1bn milestone marks tangible progress for Ithala’s 257 000 depositors who were locked out of their accounts from January last year following the Prudential Authority’s move to liquidate the provincially owned entity.
FNB chief executive Harry Kellan said reaching this mark so quickly reflected both the scale of the task and the dedication of the bank’s teams.
“While the payouts are still under way, our priority remains on assisting every eligible customer in an orderly, secure, and dignified manner,” he said.
Will payouts stay on track?
From the outset, FNB has relied on direct SMS notifications to manage the flow of depositors into branches. The bank has previously indicated that this phased, SMS-based approach is designed to reduce congestion and ensure fair access.
Each SMS includes a specific branch visit date, and customers are strongly encouraged to wait for their official notification before arriving at a branch.
FNB told Moonstone that customers arriving outside their allocated dates may have to return on an alternative date, depending on customer volumes on the day. The bank added that customers can return on any date convenient to them to collect their funds.
“Our aim is to assist all Ithala customers, and to ensure we provide a seamless experience.
The bank added that Ithala depositors with outstanding payouts will continue to receive SMS notifications with their scheduled branch visit dates.”
FNB noted that there will be instances where Ithala depositors could not be contacted due to outdated or incorrect contact details.
“But that is why we are not relying on the SMS to reach customers but also using community radio stations and word-of-mouth to advise customers of the process to claim their funds.”
Process is verification-led
Payouts can be accessed at any FNB branch nationwide, with a scheduling process in place to manage queues and minimise waiting times.
FNB has emphasised that the process remains verification-led, with depositors required to be validated before funds are released. Under the framework announced in December, once verification is completed, payments are typically processed within about two days.
The bank has cautioned that delays can arise where documentation is incomplete or where depositor records require additional checks.
“Customers are also advised to bring the correct documentation upon their visit to complete the verification process, as advised by the SMS. Incorrect or incomplete documentation may necessitate a return to branch and cause delays.”
FNB added it is important to note that funds can be paid out only once all the verification checks have been completed.
What if no SMS has arrived?
In December, KwaZulu-Natal Premier Thamsanqa Ntuli acknowledged the severe impact of the freeze, including delayed rent and school fees, halted business operations, and acute financial strain on households.
FNB reassured customers that each Ithala depositor will be contacted directly.
“Allowing the SMS-based scheduling process to run its course helps us manage queues effectively and ensures a better experience for all.”
According to FNB, the bank’s team is sending about 5 000 SMS invites to customers daily.
“Our aim is to have sent all the SMS notifications to our customers by the end of February. We advise customers to be patient, and if they have not been contacted by the end of February, to then enquire at their nearest FNB branch.”
No FNB account required
Depositors are not required to become FNB clients, and payouts do not take place at Ithala branches.
FNB states that Ithala depositors can advise FNB how they would like to receive their payments. FNB will make payments to any bank where the recipient is the main account holder.
“Alternatively, an eWallet payment can also be done for amounts of up to R3 000. Based on the customers’ preference, FNB can also open a new FNB account for the purpose of receiving a payment.”
Loan holders, meanwhile, are required to continue repayments into a dedicated Absa account.
Guarding against scams
The risk of fraud has loomed large throughout the Ithala crisis. When the repayment framework was first announced, Ntuli warned depositors to be on high alert: no official is authorised to request a fee to release funds, and any such request should be treated as a scam.
FNB has reiterated that all communications are conducted directly with depositors and that no intermediaries are involved in the payout process.
“All customers are validated, before payments are issued. This is to ensure that the correct recipient receives the payout. All customers will provide their RSA ID to the bank, where the identity is then electronically confirmed via with the Department of Home Affairs.”
The bank also conducts quality assurance on each transaction before funds are released.
“In addition, customer SMSes will contain the branch and account balance per individual customer. If required, customers can visit their nearest branch if they have queries around the validity of the communication,” FNB said.
From legal limbo to limited relief
Ithala’s depositor crisis stems from its long-running failure to secure a full banking licence. Although often described as a “state bank”, Ithala operated under exemption notices issued in terms of the Banks Act, allowing it to take deposits without being licensed.
The final exemption lapsed in December 2023 after Ithala failed to meet key conditions, including obtaining authorisation to establish a bank by June that year. The Prudential Authority subsequently appointed a repayment administrator and applied for liquidation, triggering an automatic freeze on depositor accounts.
While the liquidation application remains pending before the High Court in Pietermaritzburg, Treasury’s R2.2bn allocation has ensured that depositors can be repaid even as legal battles continue.
