In August 2017, VBS Mutual Bank encountered a crisis that ultimately resulted in its demise. The bank had been unlawfully accepting large deposits from municipalities, redirecting a significant portion of these funds to several parties, including the bank's management, municipal staff, commission agents, and political influencers. The National Treasury stepped in, directing municipalities to pull their funds from VBS and prohibiting any additional deposits, which marked the beginning of the bank's decline.
paraphrase:
In August 2017, VBS Mutual Bank faced a crisis that led to its eventual downfall. The bank had been illegally receiving multimillion-rand deposits from municipalities, diverting much of this money to various individuals, including the bank’s management, municipal employees, commission agents, and political power brokers. National Treasury intervened, instructing municipalities to withdraw their funds from VBS and forbidding further deposits, which initiated the bank’s collapse.
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