Ubank has enough money to meet the requirements of its customers and depositors - but it doesn't have enough money on its balance sheet, or in reserve, to survive unforeseen circumstances such as future losses. This heightens its risk of becoming insolvent, putting the deposits and savings of its customers at risk.

Ubank, a small retail bank focused primarily on providing financial services for mine workers and their families, has been placed under curatorship by the Reserve Bank because its capital adequacy profile has deteriorated in recent months.

The Reserve Bank is worried that Ubank has run out of money and its risk of collapse has heightened, pushing the central bank to take the day-to-day administration of the retail bank away from its management team.

Ubank will remain operational, but its day-to-day management will be taken over by Zola Beseti, a KMPG director who has been appointed as the bank's curator.

Ubank will follow the footsteps of African Bank, which the Reserve Bank placed under curatorship in 2014 after the bank almost collapsed beneath a mountain of unrecoverable and soured loans.

Over the past two years, the Reserve Bank, through its Prudential Authority office - which regulates banks in South...