Minister of Cooperative Governance and Traditional Affairs, Zweli Mkhize has urged municipalities, with investments in VBS Mutual Bank to work on recovery plans.

Mkhize said this was necessary to augment possible service delivery disruptions due to the budget shortfall as a result of loss of investment.

A total of 14 municipalities invested funds in VBS Mutual Bank as part of short-term investments. In March, VBS Mutual Bank was put under curatorship due to concerns over its liquidity and required reserves were raised late in 2017.

Mkhize held a meeting on Tuesday with the mayors and municipal managers, whose municipalities are in the red, to offer them assistance.

“The meeting also discussed in detail the nature of these investments. Most importantly, the meeting looked at the possible impact that these investments could have on service delivery,” said Mkhize.

Update communities

In addition to recovery plans, Mkhize urged municipalities to go out and inform the communities they serve about the challenge and the measures in place.

All municipalities are expected to report back to the department.

“CoGTA will await the various processes including investigations by the South African Reserve Bank which CoGTA supports, and also committed to continue monitoring the situation that is unfolding with regards the investments made to VBS bank,” said Mkhize.