South Africa placed Ubank Ltd, a lender partly managed by mine workers, under administration.

Finance Minister Enoch Godongwana appointed KPMG South Africa as curator of the bank because of concerns about the lender’s corporate governance, a high number of internal-control weaknesses, and a lack of sufficient capital to ensure the viability of the bank, central bank Governor Lesetja Kganyago told reporters Monday in an online briefing.

“KPMG will be responsible for Ubank with immediate effect,” Kganyago said. “This is being done to proactively mitigate the adverse consequences on Ubank’s depositors, and to preserve the stability of the South African banking and financial services sector as a whole,” he said.

Ubank was created more than four decades ago to serve as a savings fund for mine workers. It converted to a commercial bank in the early 1990s and is now owned by a trust that is managed by trustees elected by entities including the National Union of Mineworkers and the Minerals Council South Africa, according to its website.

The minerals council referred queries to the banking regulator while NUM’s General Secretary Makgabo William Mabapa said the union was shocked by the development.

“We were called last night by the Prudential Authority advising that we should raise 800 million rand,” Mabapa said in a statement. “Of course that money was successfully raised within 24 hours. We are wondering why the PA decided to advise the Reserve Bank to take such a drastic decision.”

Ubank has assets of R5.25 billion ($324 million) and more than 4.7 million client accounts, the central bank said. It is the first to be placed under curatorship since VBS Mutual Bank was placed in administration in 2018, after more than R1.9 billion was plundered.

At the time of its collapse, VBS was the seventh-smallest of South Africa’s 21 banks. The bank is now in liquidation, Kganyago said at the briefing.

In 2014, the central bank put African Bank Holdings Ltd under curatorship after the lender’s bad debts rose and the market shunned its bond sales.

The central bank is now planning an initial public offering for African Bank – which exited administration and is currently operating as a normal bank – after it failed to find suitable buyers for its 50% shareholding.