The facts are: Saambou Bank went into curatorship at close of business last Saturday, taking www.20twenty.com with it. The bank had a massive range of withdrawals by investors late last week. The bank is not insolvent at this time, just illiquid. The government has appointed a curator to slow withdrawals down until Saambou can recover. The curator has said that all deposits under R100,000 are perfectly safe. The entire run seems to have been sparked by the ABSA announcement a few weeks ago that it was posting a huge loss in its microlending division, and the 'markets' perception that Saambou might also be facing microlending losses. This led to a decline in Saambou's share price, and a consequent downgrading of its financial credit rating - all of which meant that it could not borrow enough cash quickly enough to meet the withdrawals. For the latest developments - check out the 20twenty site - it seems a lot more current.

Despite current events, I still feel that 20Twenty was the best Internet banking thing to happen here. They were pretty exceptional - even when they got overwhelmed by the public response to a halfway decent banking firm. Irrespective of the outside challenges that have occurred, they remain the beacon for banking service - and I still believe that the mainstream banks are in for a tough ride if more Internet banks of this nature appear. Overseas, Internet banks are offering immense value when contrasted to the more formal, older banks. For this alone, well done 20twenty.

We're taught in school that most questions have just a single answer. That's not true. Virtually every question you face as an adult has no simple answer. Each issue has a wide variety of possible answers, ranging from really bad to superbly good - depending on your viewpoint. So it is with banking. I have a simple rule in my life - borne of intense pain when I closed a firm in 1992 and my family lost everything - do not put all your eggs in one basket! This has been a constant theme in this weekly email, and in all of our seminars. So I remain astounded by those folk who opted to go for 20twenty last year [possibly because I said I liked them] and then promptly threw away all my requests that they do not replace their existing banking facilities - merely add to them.

One of the main reasons for the stress we small business owners face - is our banking relationships. I believe that the single biggest precipitator of business closure is when a bank summarily removes all facilities. The quick answer is to maintain at least 2 banking relationships - yet we persist in sticking with just 1 bank! If there is a single thing that has been ingrained in me since 1992 - and is now part of my psyche - you cannot rely on a single bank - ever! Sooner or later you will be disappointed [for whatever reason] - so it makes sense to prepare for that disappointment now - before you face it.

If you managed to have all your eggs in the 20twenty basket - then you might find that the quickest and easiest thing you can do - right now - is apply for a bluebean card - which was also mentioned in my article late last year. They were a little slower off the mark - but you should have a facility and a card in your wallet/purse by Friday. That means you can transact by the weekend. Bluebean is a division of Standard Bank.

If you're deeply pissed off at 20Twenty for not warning you - please remember that having a curator appointed means that they no longer have control and are not allowed to do anything at all - not even talk to you - without the curators permission. It's pretty much the same when your business goes into liquidation - it gets taken out of your hands - and no matter how good your intentions, you are not allowed to do anything. Your hands are tied. It's an intensely frustrating and frightening experience - which is why I choose to spend my life teaching others how not to go there.

© Peter Carruthers, www.petesweekly.co.za

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