The Central Bank of South Africa said Monday that it has handed over to Ubank, a small South African lender that mainly offers financial services to families of gold and platinum miners, under the supervision of Immediate Action.

Source: SARB. Governor of the South African Reserve Bank Lesseta Kganyaga.

South African Reserve Bank Governor Leseta Kganyaga said the central bank had tightened lender control over the past two years due to corporate governance problems, inability to diversify its business model and inability to inject sufficient capital, among other problems.

“After properly considering the seriousness of the problems facing the bank … The Prudential Authority has decided to immediately transfer Ubank under the supervision,” he said at a virtual briefing.

The central bank puts the bank under supervision, which means it can appoint an independent administrator who will take over the day-to-day operations of the bank from the current management.

Ubank has been placed under the control of the Central Bank’s Prudential Authority, which gives it legitimate means to implement a settlement plan, such as finding an investor or injecting capital and avoiding liquidation.

He appointed KPMG South Africa as the bank’s administrator, but the governor assured that the lender would remain open to business and would continue to be highly liquid and would continue to lend, Kganyago stressed.

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