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Reserve Bank bails out CPD as Land Bank defaults on loans

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The Bank has issued a R3.45bn guarantee to bail out the Corporation for Public Deposits, putting further pressure on the state coffers

Deputy Reserve Bank governor Fundi Tshazibana. Picture: FREDDY MAVUNDA

The issue adds a further strain on state finances as the government props up its main power utility Eskom, and SAA, which were already struggling before the coronavirus crisis, and now faces rising defaults at Land Bank. Deputy governor of the Reserve Bank and chair of the CPD, Fundi Tshazibana, said this week that the guarantee was to cover the investment arm’s losses in the 2019/2020 period and replenish reserves, which had dwindled to zero.

“Because of Land Bank’s default, we were running at a loss and we weren’t going to be a going concern ... That would have been of real concern to depositors,” she said.

 

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