Banks Act, 1990

Act 94 of 1990

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Citation

Act 94 of 1990

Date

Language

English

Type

Act

Publication

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Subject areas > Finance and Money

Banks Act, 1990

Act 94 of 1990

Published in Government Gazette 12617 on 11 July 1990
Assented to on 28 June 1990
There are multiple commencements

Provisions	Status
Chapter I (section 1–2); Chapter II (section 3–10); Chapter III (section 11–35); Chapter IV (section 36–50); Chapter V, section 51–59, section 60(3)–(4), section 61–69; Chapter VI (section 70–75); Chapter VII (section 76–80); Chapter VIII (section 81–84); Chapter IX (section 85–96)	commenced on 1 February 1991 by Proclamation 12 of 1991.
Chapter V, section 60(1)–(2), (3)(a)–(b), (5)–(6)	commenced on 9 August 1991 by Proclamation R73 of 1991.
Chapter IV, section 36(10)(b)(iii)–(iv), (10)(c)(i)–(ii), section 37(2)(c); Chapter V, section 54(11), section 63(4), section 69(1)(a)–(c), (3)(d)–(i); Chapter VI, section 70(5)(a)(vi)(aa)–(bb), section 72(4)(a)–(b)	commenced on 15 April 1992.
Chapter I, section 1(1A); Chapter III, section 13(2)(fA), section 30(a)(i)–(vi); Chapter V, section 69(6A); Chapter VI, section 70(6)(a)–(c); Chapter IX, section 91(1)(aA)	commenced on 10 March 1993.
Chapter IV, section 38(2)(e)	commenced on 14 May 1993.
Chapter I, section 1(1A)(d); Chapter II, section 6(3)(a)–(e); Chapter III, section 18A–18B, section 34(2A); Chapter IV, section 37(7)(a)–(c); Chapter V, section 54(4)(a)–(b), section 60(5)(a)–(b), section 68(1)(c), (5), section 69(8), section 69A; Chapter VI, section 73(3), section 75(3A), (4)(b)(i)–(vi); Chapter VII, section 78(1)(g)(i)–(iii), section 79(3)–(4)	commenced on 1 May 1995.
Chapter III, section 23(2)(c), section 33A	commenced on 1 June 1996.
Chapter III, section 34(2B)–(2C), (5); Chapter V, section 52(1)(aA), (6), section 53(aA), section 54(8)(aA), (8A), section 69(6B)	commenced on 1 November 1996.
Chapter II, section 7(3)–(5), section 9(2A)–(4A); Chapter III, section 22(1)(a)–(b); Chapter V, section 69(2A)–(2G), (9)–(10); Chapter VI, section 70(2)(a)(i)–(ii), (2)(b)(ii)(aa)–(bb), (2A)–(2B), section 70A, section 73(1)(a)–(b), (2)(a)–(c), (3)(a)(i)–(ii), (3)(b)(i)–(viii)	commenced on 18 October 2000.
Chapter II, section 7(1A); Chapter III, section 22(2A), section 34(6); Chapter V, section 60(1A)–(1B), (5)(a)(i)–(iv), (5)(b)(i)–(iv), (6)(a)–(k), section 60A–60B, section 61(3)(a)(i)–(ii), (3)(b)(i)–(iv), (6), section 64(2)(d), section 64A–64B, section 69A(5A); Chapter VII, section 78(1)(k); Chapter IX, section 91(4)(c), (6A)	commenced on 5 August 2003.

[This is the version of this document as it was from 5 August 2003 to 31 December 2007.]

[Amended by Deposit-taking Institutions Amendment Act, 1992 (Act 42 of 1992) on 1 February 1991]
[Amended by Deposit-taking Institutions Amendment Act, 1991 (Act 81 of 1991) on 12 June 1991]
[Amended by Deposit-taking Institutions Act, 1990: Amendment (Government Notice R1765 of 1991) on 1 August 1991]
[Amended by Deposit-taking Institutions Amendment Act, 1992 (Act 42 of 1992) on 15 April 1992]
[Amended by Deposit-taking Institutions Amendment Act, 1993 (Act 9 of 1993) on 10 March 1993]
[Amended by Safe Deposit of Securities Act, 1992 (Act 85 of 1992) on 14 May 1993]
[Amended by Banks Act, 1994: Amendment (Proclamation 132 of 1994) on 27 July 1994]
[Amended by Banks Amendment Act, 1994 (Act 26 of 1994) on 1 May 1995]
[Amended by Banks Amendment Act, 1994 (Act 26 of 1994) on 1 June 1996]
[Amended by Banks Amendment Act, 1996 (Act 55 of 1996) on 1 November 1996]
[Amended by Banks Amendment Act, 2000 (Act 36 of 2000) on 18 October 2000]
[Amended by Banks Amendment Act, 2003 (Act 19 of 2003) on 5 August 2003]

[short title, previously Deposit-taking Institutions Act, substituted by section 26 of Act 9 of 1993.][The Act was amended by the substitution, wherever they occur, for the expressions “Deposit-taking Institutions” of the expression “Banks”; “deposit-taking institutions” of the expression “banks”; “deposit-taking institution” of the expression “bank” and “deposit-taking institution’s” of the expression “bank's”, by section 25(a) of Act 9 of 1993.](English text signed by the State President.)ACTTo provide for the regulation and supervision of the business of public companies taking deposits front the public; and to provide for matters connected therewith.BE IT ENACTED by the State President and the Parliament of the Republic of South Africa, as follows:

Chapter I
Interpretation and application of Act

1. Definitions

(1)In this Act, unless the context otherwise indicates—"agency", in relation to a bank, means a right granted to a person by that bank to receive on its behalf from its clients any deposits, money due to it or applications for loans or advances, or to make payments to such clients on its behalf;"bank" means a public company registered as a bank in terms of this Act;[definition of "bank" inserted by section 1(a) of Act 9 of 1993 and substituted by section 1(a) of Act 26 of 1994]"banking group" means a group consisting of two or more persons, whether natural or juristic persons, that are predominantly engaged in financial activities and one or more of which is a bank and—(a)each of which persons is an associate, as defined in section 37(7), of any one of the others; or(b)which persons are so interconnected that should one of them experience financial difficulties, another one or all of them would likely be adversely affected,irrespective of whether any of those persons is domiciled in the same country as any of the others;[definition of "banking group" inserted by section 1(a) of Act 36 of 2000]"branch" means an institution that is not a public company as contemplated in section 11(1), but by means of which a foreign institution conducts the business of a bank in the Republic under an authorization referred to in section 18A;[definition of "branch" inserted by section 1(a) of Act 36 of 2000]"branch of a bank" means an institution by means of which a bank conducts the business of a bank outside the Republic;[definition of "branch of a bank" inserted by section 1(a) of Act 36 of 2000]"board of review" means the board of review established by section 9(2);[definition of "board of review", previously "board of appeal" substituted by section 1(b) of Act 36 of 2000]"chief executive officer", in relation to a bank, means a person who, either alone or jointly with one or more other persons, is responsible under the direct authority of the board of directors of the bank for the conduct of the business of the bank;"chief representative officer" means the person in charge of a representative office;"close relative", in relation to any person, means—(a)a spouse;(b)a child, stepchild, parent or stepparent;(c)the spouse of any of the persons mentioned in paragraph (b);[definition of "close relative" substituted by section 1(a) of Act 19 of 2003]"Companies Act" means the Companies Act, 1973 (Act No. 61 of 1973);"company" means a company under the Companies Act;"controlling company" means a public company registered in terms of this Act as a controlling company in respect of a bank;"co-operative" means a co-operative incorporated in terms of the Cooperatives Act, 1981 (Act No. 91 of 1981), and includes a co-operative society or co-operative company deemed in terms of section 2 of that Act to be incorporated in terms of the said Act;"corporate governance", in relation to the management of a bank or a controlling company, includes all structures, processes, policies, systems and procedures whereby the bank or controlling company is governed;[definition of "corporate governance" inserted by section 1(b) of Act 19 of 2003]"deposit", when used as a noun, means an amount of money paid by one person to another person subject to an agreement in terms of which—(a)an equal amount or any part thereof will be conditionally or unconditionally repaid, either by the person to whom the money has been so paid or by any other person, with or without a premium, on demand or at specified or unspecified dates or in circumstances agreed to by or on behalf of the person making the payment and the person receiving it; and[paragraph (a) substituted by section 1(a) of Act 55 of 1996](b)no imprest will be payable on the amount so paid or interest will be payable thereon at specified intervals or otherwise,notwithstanding that such payment is limited to a fixed amount or that a transferable or non-transferable certificate or other instrument providing for the repayment of such amount mutatis mutandis as contemplated in paragraph (a) or for the payment of interest on such amount mutatis mutandis as contemplated in paragraph (b) is issued in respect of such amount; but does not include an amount of money—(i)paid as an advance, or as part payment, in terms of a contract for the sale, letting and hiring or other provision of movable or immovable property or of services, and which is repayable only in the event of—(aa)that property or those services not in fact being sold, let and hired or otherwise provided;(bb)the fulfilment of a resolutive condition forming part of that contract; or(cc)the non-fulfilment of a suspensive condition forming part of that contract;(ii)paid as security for the performance of a contract or as security in respect of any loss which may result from the non-performance of a contract;(iii)without derogating from the provisions of paragraph (ii), paid as security for the delivery up or return of any movable or immovable property, whether in a particular state of repair or otherwise;(iv)paid by a holding company to its subsidiary, or by a subsidiary to its holding company, or by one subsidiary to another subsidiary of the same, holding company;(v)paid by a person who, at the time of such payment—(aa)is a close relative of the person to whom such money is paid;(bb)is a director or executive officer of the person to whom such money is paid; or(cc)is a close relative of a director or executive officer of the person to whom such money is paid;(vi)paid by any person to a registered insurer as defined in section 1(1) of the Insurance Act, 1943 (Act No. 27 of 1943), as a premium in respect of any kind of policy defined or referred to in that section and under which policy that insurer assumes, in return for such premium, such an obligation as is described in that section in the definition of, or with reference to, the kind of policy in question;[paragraph (vi) substituted by section 1 of Government Notice R1765 of 1991 and amended by section 1(a) of Act 42 of 1992](vii)paid to a fund registered or provisionally registered under section 4 of the Pension Funds Act, 1956 (Act No. 24 of 1956), as a contribution, contemplated in Section 13A of that Act, by or on behalf of a member of that fund; or[paragraph (vii) amended by section 1(b) of Act 42 of 1992](viii)paid to a benefit fund, as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962), as a contribution or a subscription by or on behalf of a member of that fund,[paragraph (viii) added by section 1(c) of Act 42 of 1992]and "deposit" when used as a verb, or any derivative thereof, has a corresponding meaning;"director" includes an executive director and non-executive director, unless expressly stated otherwise;[definition of "director" inserted by section 1(c) of Act 19 of 2003]"deposit-taking institution" [definition of "deposit-taking institution" deleted by section 1(b) of Act 9 of 1993]"domestic shareholder", in relation to a bank or controlling company, means a shareholder of the bank or controlling company—(a)who is resident in the Republic;(b)which is a company controlled, mutatis mutandis as contemplated in paragraph (a), (b) or (c) of the definition of "controlling company" in section 1 of the Companies Act, by a person or persons who is or are resident in the Republic or, in the case of a juristic person or persons, was or were formed, established or incorporated by or under a law of the Republic;(c)which is a juristic person other than a company and was formed, established or incorporated by or under a law of the Republic, excluding a pension fund registered in terms of the Pension Funds Act, 1956 (Act No. 24 of 1956), where the head office of the association which carries on the business of that fund, or of every employer who is a party to that fund, is outside the Republic; or(d)that is a person belonging to a category of persons recognized by the Registrar as domestic shareholders for the purposes of this Act;"employee in charge of a risk management function", in relation to a bank, means that employee of the bank who is ultimately responsible for the management of one or more of the following types of risk to which the bank is exposed, namely—(a)solvency risk;(b)liquidity risk;(c)credit risk;(d)currency risk;(e)market risk (position risk);(f)interest rate risk;(g)counterparty risk;(h)technological risk;(i)operational risk;(j)compliance risk; or(k)any other risk regarded as material by that bank;[definition of "employee in charge of a risk management function" inserted by Act 55 of 1996 and substituted by section 1(d) of Act 19 of 2003]"executive officer", in relation to any institution—(a)that is not a bank, includes any manager, the compliance officer, the secretary of the company and any director who is also an employee of such an institution;(b)that is a bank, includes any employee who is a director or who is in charge of a risk management function of the bank, the compliance officer, secretary of the company or any manager of the bank who is responsible, or reports, directly to the chief executive officer of the bank;[definition of "executive officer" substituted by section 1(b) of Act 26 of 1994, section 1(c) of Act 55 of 1996 and by section 1(e) of Act 19 of 2003]"fellow subsidiary", in relation to a company, means any other company which is a subsidiary of the holding company of which the first-mentioned company is a subsidiary;"financial statements" means annual financial statements referred to in sections 286 and 288 of the Companies Act;"foreign shareholder", in relation to a bank or controlling company, means a shareholder of such bank or controlling company that is not a domestic shareholder;"general public" does not include a bank;"group of banks" means a group consisting of two or more banks which have the same holding company, and such holding company;"holding company" means a holding company as defined in section 1(4) of the Companies Act;"Land Bank" means the Land and Agricultural Bank of South Africa;"liquid assets" means—(a)Reserve Bank notes, subsidiary coin (excluding such notes or coin to the extent to which it is taken into account in the calculation of the minimum reserve balance a bank is required to maintain in an account with the Reserve Bank in terms of section 10A of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989)), gold coin and bullion;[paragraph (a) substituted by section 1(c) of Act 9 of 1993](b)any credit balance in a clearing account with the Reserve Bank;[paragraph (b) substituted by section 1(d) of Act 9 of 1993](c)[paragraph (c) deleted by section 1(e) of Act 9 of 1993](d)treasury bills of the Republic;(e)[paragraph (e) deleted by section 1(e) of Act 9 of 1993](f)securities issued by virtue of section 66 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), to fund the National Government;[paragraph (f) substituted by section 1(c) of Act 36 of 2000 and section 1(f) of Act 19 of 2003](g)bills issued by the Land Bank for purposes of extending short-term financing—(i)to an agricultural co-operative or a special farmers' co-operative formed and incorporated under the Co-operatives Act, 1981 (No. 91 of 1981), or deemed thereunder to be so formed and incorporated, for the purchase of agricultural products from farmers and of agricultural implements, equipment and other means of production for resale to farmers for the production of agricultural products; or(ii)to a control board established under the Marketing Act, 1968 (Act No. 59 of 1968), for the purchase of agricultural products;(h)[paragraph (h) deleted by section 1(e) of Act 9 of 1993](i)[paragraph (i) deleted by section 1(e) of Act 9 of 1993](j)securities of the Reserve Bank with a maturity of not more than three years to the last redemption date thereof;"Minister" means the Minister of Finance;"money broker" [definition of "money broker" deleted by section 1(d) of Act 42 of 1992]"money broking" [definition of "money broking" deleted by section 1(d) of Act 42 of 1992]"mutual building society" [definition of "mutual building society" deleted by section 1(c) of Act 26 of 1994]"mutual bank" means a mutual bank as defined in section 1(1) of the Mutual Banks Act, 1993 (Act No. 124 of 1993);[definition of "mutual bank" inserted by section 1(d) of Act 26 of 1994]"person" includes any partnership;"prescribed" means prescribed by regulation;"primary share capital" means capital obtained through the issue of ordinary shares, non-redeemable non-cumulative preference shares or prescribed categories of preferred securities, excluding such ordinary shares, non-redeemable non-cumulative preference shares or prescribed categories of preferred securities issued in pursuance of the capitalization of reserves resulting from a revaluation of assets;[definition of "primary share capital" inserted by section 1(d) of Act 36 of 2000]"primary unimpaired reserve funds" means funds obtained from actual earnings or by way of recoveries, premiums on the issue of ordinary or non-redeemable non-cumulative preference shares or a surplus on the realization of capital assets, and which have been set aside as a general or special reserve, are disclosed as such a reserve in the financial statements of the bank concerned and are available for the purpose of meeting liabilities of or losses suffered by the bank, but does not include any fund required to be maintained in terms of any other law;[definition of "primary unimpaired reserve funds" inserted by section 1(d) of Act 36 of 2000]"public" includes a juristic person;"Registrar" means the Registrar of Banks designated under section 4;"Registrar of Companies" means the Registrar of Companies appointed under section 7 of the Companies Act;"regulation" means a regulation made under section 90;"Regulations relating to Banks" means the Regulations relating to Banks as amended or re-enacted from time to time under section 90;[definition of "Regulations relating to Banks" inserted by section 1(e) of Act 36 of 2000]"Regulations relating to Banks’ Financial Instrument Trading" means the Regulations relating to Banks’ Financial Instrument Trading as published by Government Notice No. R. 1058 of 21 August 1998, and as amended from time to time;[definition of "Regulations relating to Banks’ Financial Instrument Trading" inserted by section 1(e) of Act 36 of 2000]"Regulations relating to branches" means the Regulations titled ‘Conditions for conducting business of bank by foreign institution by means of branch in Republic’ published by Government Notice No. R. 1414 of 28 December 2000;[definition of "Regulations relating to branches" inserted by section 1(g) of Act 19 of 2003]"representative office", in relation to—(a)a foreign institution referred to in section 34 (1), means premises situated within the Republic and from which the business referred to in the said section 34 (1) and conducted by such foreign institution in the other country referred to in that section, is promoted or assisted in any way; or(b)the establishment by a bank of a representative office outside the Republic as contemplated in section 52 (1)(e), means premises situated outside the Republic and front which the business conducted by such bank within the Republic in terms of this Act is promoted or assisted in any way;"Republic", for the purposes of the definition of "domestic share-holder", includes any state the territory of which formerly formed part of the Republic;"Reserve Bank" means the South African Reserve Bank;"secondary capital" means a prescribed percentage of capital obtained through the issue, with the prior written approval of the Registrar and in accordance with conditions approved by the Registrar in writing and on such further conditions, if any, as may be prescribed, of—(a)cumulative preference shares;(b)ordinary shares, or preference shares other than cumulative preference shares, issued in pursuance of the capitalization of reserves resulting from a revaluation of assets; and(c)prescribed categories of debt instruments;[definition of "secondary capital" inserted by section 1(f) of Act 36 of 2000]"secondary unimpaired reserve funds" means—(a)such fund obtained from actual earnings or by way of recoveries, as may be prescribed and which have been set aside, but which are not disclosed as a general or special reserve in the financial statements of the bank concerned;(b)a prescribed percentage of the amount of any surplus resulting from a revaluation of assets and determined as prescribed;(c)a prescribed amount of general provisions held against unidentified and unforeseen losses; and(d)funds obtained by way of premiums on the issue of cumulative preference shares-or debt instruments issued in accordance with the prescribed conditions, whether or not such funds are disclosed as a general or special reserve in the financial statements of the bank concerned,but does not include any fund required to be maintained in terms of any other law;[definition of "secondary unimpaired reserve funds" inserted by section 1(f) of Act 36 of 2000]"subsidiary" means a subsidiary as defined in section 1(3) of the Companies Act;"tertiary capital" means—(a)accrued current-period encapitalized net profits derived from trading activities; or(b)capital obtained by means of unsecured subordinated loans negotiated, subject to such conditions as may be prescribed;[definition of "tertiary capital" inserted by section 1(g) of Act 36 of 2000]"the business of a bank" means—(a)the acceptance of deposits from the general public (including persons in the employ of the person so accepting deposits) as a regular feature of the business in question;[paragraph (a) substituted by section 1(f) of Act 9 of 1993 and by section 1(e) of Act 26 of 1994](b)the soliciting of or advertising for deposits;(c)the utilization of money, or of the interest or other income earned on money, accepted by way of deposit as contemplated in paragraph (a)—(i)for the granting by any person, acting as lender in such person’s own name or through the medium of a trust or a nominee, of loans to other persons;(ii)for investment by any person, acting as investor in such person’s own name or through the medium of a trust or a nominee; or(iii)for the financing, wholly or to any material extent, by any person of any other business activity conducted by such person in his or her own name or through the medium of a trust or a nominee;[paragraph (c) substituted by section 1(h) of Act 19 of 2003](d)the obtaining, as a regular feature of the business in question, of money through the sale of an asset, to any person other than a bank, subject to an agreement in terms of which the seller undertakes to purchase from the buyer at a future date the asset so sold or any other asset; or(e)any other activity which the Registrar has, after consultation with the Governor of the Reserve Bank, by notice in the Gazette declared to be the business of a bank,but does not include—(aa)the acceptance of a deposit by a person who does not purport to accept deposits on a regular basis and who has not advertised for or solicited such deposit: Provided that—(i)the person accepting deposits as contemplated in this paragraph shall not at any time hold deposits from more than twenty persons or deposits amounting in the aggregate to more than R500 000; and(ii)a person and any person controlled directly or indirectly by the first-mentioned person (whether such control is through shareholding or otherwise) or managed by such first-mentioned person, and a subsidiary of such last-mentioned person, who accepts deposits as contemplated in this paragraph shall for the purposes of subparagraph (i) of this proviso be deemed to be one person;[subparagraph (ii) substituted by section 1(j) of Act 19 of 2003][subparagraph (aa) amended by section 1(i) of Act 19 of 2003](bb)the borrowing of money from its members by a co-operative subject to such conditions as may be prescribed;(cc)any activity of a public sector, governmental or other institution, or of any person or category of persons, designated by the Registrar, with the approval of the Minister, by notice in the Gazette, provided such activity is performed in accordance with such conditions as the Registrar may with the approval of the Minister determine in the relevant notice;(dd)any activity contemplated in paragraph (a), (b) or (c)—(i)performed by any institution registered or established in terms of, by or under any other Act of Parliament and designated by the Minister by notice in the Gazette; or(ii)performed in terms of any scheme authorized and controlled by, and conducted in accordance with the provisions of, any other Act of Parliament and so designated by the Minister, provided such activity is performed in accordance with such conditions as the Minister may determine in the relevant notice;(ee)the acceptance, subject to such conditions as the Registrar may from time to time determine by notice in the Gazette, of money against debentures, bills of exchange, promissory notes or other similar financial instruments, provided the money so accepted is not used, in the case of such acceptance of money by a person other than a bank, for the granting of money loans or credit (other than customary credit in respect of the sale of goods or the provision of services by the issuer of such financial instruments) to the general public;[paragraph (ee) substituted by section 1(e) of Act 42 of 1992 and amended by section 1(c)(i) of Act 55 of 1996](ff)the effecting, subject to the provisions of any other Act of Parliament and to such conditions, if any, as the Registrar may from the time to time determine by notice in the Gazette, of a money lending transaction directly between a lender and a bank as borrower through the intermediation of a third party who does not act as a principal to the transaction (hereinafter in this paragraph referred to as the agent), provided the funds to be lent in terms of the money lending transaction are entrusted by the lender to the agent subject to a written contract of agency in which, in addition to any other terms thereof, at least the following matters shall be recorded:(i)Confirmation that the agent acts as the agent of the lender; and(ii)that the lender assumes, except in so far as there may in law be a right of recovery against the agent, all risks connected with the administration of the entrusted funds by the agent, as well as the responsibility to ensure that the agent executes the instructions as recorded in the written contract of agency; or[paragraph (ff) substituted by section 1(e) of Act 42 of 1992, by section 1(g) of Act 9 of 1993 and by section 1(d)(ii) of Act 55 of 1996](gg)the activities, set forth in subparagraphs (A) and (B) hereunder, of a person (hereinafter in this paragraph referred to as the mandatary) that—(i)is a natural or juristic person registered in terms of, or a juristic person established by or under, any other Act of Parliament and the main business activities of whom or of which are regulated or controlled in terms of, by or under such other Act of Parliament; and(ii)has been designated by the Registrar by notice in the Gazette,which mandatary, for purposes of effecting a money lending transaction with a bank—(A)accepts money from the mandator in terms of a prescribed contract of mandate; and(B)in the execution of the mandate, and subject to such conditions as the Registrar may determine in the notice referred to in subparagraph (ii) above, deposits such money into an account maintained by the mandatary with a bank, irrespective as to whether or not such money is so deposited together with money so accepted by the mandatary from other mandators.[paragraph (gg) added by section 1(d)(iii) of Act 55 of 1996]"this Act" includes the regulations;"undesirable practice" means any act prohibited, or any failure to perform any act enjoined, by section 78 (1), and, in relation to a particular bank or banks specified in a notice referred to in section 78 (2) (b) or all banks, includes any act which in terms of a notice referred to in section 78 (2) constitutes an undesirable practice for such particular bank, such specified banks or all banks, as the case may be;"wholly owned subsidiary" means a wholly owned subsidiary as defined in section 1 of the Companies Act.

(1A)

(a)In order to determine, for the purposes of this Act, whether a particular person is a fit and proper person to hold the office of a director or an executive officer of a bank or a controlling company, the Registrar shall have regard to the following qualities, in so far as they are reasonably determinable, of the person concerned:

(i)The general probity of that person;[subparagraph (i) substituted by section 1(k) of Act 19 of 2003]

(ii)the competence and soundness of judgment of that person for the fulfilment of the responsibilities of the office in question; and[subparagraph (ii) substituted by section 1(k) of Act 19 of 2003]

(iii)the diligence with which the person concerned is likely to fulfil those responsibilities.

(b)For the purposes of and without prejudice to the generality of the provisions of paragraph (a), the Registrar may have regard to the previous conduct and activities of the person concerned in business or financial matters and, in particular, to any evidence that such person—

(i)was convicted of the offence of fraud or any other offence of which dishonesty, or the commission of violence, was an element;

(ii)had contravened the provisions of any law appearing to the Registrar to be designed for protecting members of the public against financial loss due to the dishonesty or incompetence of, or malpractices by, persons engaged in—

(aa)the provision of banking, insurance, investment or other financial services; or

(bb)the management of juristic persons,

or against financial loss due to activities relating to insolvency;

(iii)was a director who had been indicated, as contemplated in section 421(2) of the Companies Act, as the effective cause of a particular company having been unable to pay its debts;

(iv)had taken part in any business practices that, in the opinion of the Registrar, were deceitful, prejudicial or otherwise improper (whether unlawful or not) or which otherwise brought discredit on that person’s methods of conducting business; or[subparagraph (iv) substituted by section 1(l) of Act 19 of 2003]

(v)had taken part in or been associated with any such other business practices as would, or had otherwise conducted himself or herself in such a way as to, cast doubt on his or her competence and soundness of judgement.[subparagraph (v) substituted by section 1(l) of Act 19 of 2003]

(c)The Registrar shall be entitled, at any time, to request any person to complete a questionnaire that is designed to enable, and such person shall provide the Registrar with such information as may be necessary to enable, the Registrar to form an opinion, as contemplated in this subsection, regarding the qualities of that person.[paragraph (c) substituted by section 1(m) of Act 19 of 2003]

(d)Any person who refuses or fails to comply with a request addressed to that person by the Registrar under paragraph (c) shall be guilty of an offence.[paragraph (d) added by section 1(f) of Act 26 of 1994 and substituted by section 1(m) of Act 19 of 2003]

[subsection (1A) inserted by section 1(h) of Act 9 of 1993]

(2)

(a)The Minister may, on the recommendation of the Registrar and after consultation with the Governor of the Reserve Bank, by regulation amend the definition of “deposit” or “the business of a bank” for the purposes of the application of any of or all the provisions of this Act.[paragraph (a) substituted by section 1(i) of Act 9 of 1993]

(b)Every regulation made under paragraph (a) shall be of force and effect unless and until, during the session in which the relevant list has been laid upon the Tables in Parliament in accordance with the provisions of section 17 of the Interpretation Act, 1957 (Act No. 33 of 1957), every House of Parliament has by resolution disapproved of the regulation, in which event the regulation shall lapse as from a date to be specified in the resolution, but such lapsing of the regulation shall not affect the validity of anything done under such regulation before the date specified in the resolution, and nothing contained in this paragraph shall affect the power of the Minister to make a new regulation as to the subject matter of the regulation which has so lapsed.

2. Exclusions from application Act

Except where expressly stated otherwise, the provisions of this Act, in so far as they impose requirements with which any institution must comply—

(a)before it may carry on the business of a bank ; or

(b)in the lawful carrying on of the business of a bank,

shall not apply to—

(i)the Reserve Bank;

(ii)the Land Bank;

(iii)the Development Bank of Southern Africa;

(iv)the Corporation for Public Deposits established by section 2 of the Corporation for Public Deposits Act, 1984 (Act No. 46 of 1984);

(v)the Public Investment Commissioners referred to in section 2 of the Public Investment Commissioners Act, 1984 (Act No. 45 of 1984);

(vi)any mutual bank; or[paragraph (vi) substituted by section 2 of Act 26 of 1994]

(vii)any other institution or body designated by the Minister by notice in the Gazette.

Chapter II
Administration of Act

3. Office for Banks

For the registration as banks of public companies desiring to conduct the business of a bank and for the other purposes of this Act there shall, as part of the Reserve Bank, be an office in Pretoria called the Office for Banks, and at the head of such office shall be a person to be styled the Registrar of Banks.[section 3 substituted by section 2 of Act 9 of 1993]

4. Registrar and Deputy Registrar of Banks

(1)The Reserve Bank shall, subject to the approval of the Minister, designate an officer or employee in its service as Registrar of Banks, who shall perform, under the control of the said Bank and in accordance with the directions issued by that Bank from time to time, the functions assigned to the Registrar by or under this Act.

(2)The Reserve Bank may, subject to the approval of the Minister, designate so many officers or employees in its service as it may deem necessary, but not exceeding four, as Deputy Registrars of Banks, who shall, subject to the control and directions of the Registrar, be competent to perform any function which the Registrar is permitted or required to perform.[subsection (2) substituted by section 2 of Act 36 of 2000]

5. Delegation of powers and assignment of functions by Registrar

(1)The Registrar may with the approval of the Reserve Bank—

(a)delegate to any officer or employee of the Reserve Bank any power conferred upon the Registrar by or under this Act; or

(b)authorize any such officer or employee to perform any duty assigned to the Registrar by or under this Act.

(2)Any delegation under subsection (1)(a) shall not prevent the exercise of the relevant power by the Registrar personally.[subsection (2) substituted by section 2 of Act 19 of 2003]

6. Powers of inspection of, and guide-lines by, Registrar

(1)In addition to the powers and duties conferred or imposed upon him or her by this Act, the Registrar shall, for the purposes of the performance of his or her functions under this Act, have powers and duties in all respects corresponding to the powers and duties conferred or imposed by the Inspection of Financial Institutions Act, 1998 (Act No. 80 of 1998), upon a registrar contemplated in the last-mentioned Act.[subsection (1) substituted by section 3(a) of Act 19 of 2003]

(2)Any reference in this Act to an inspection or investigation made under this section shall be construed as a reference to an inspection made in accordance with the provisions of the Inspection of Financial Institutions Act, 1998.[subsection (2) substituted by section 3(b) of Act 19 of 2003]

(3)Neither the provisions of this section nor any other provision of this Act shall be construed as prohibiting the Registrar from holding discussions, from time to time, with the chief executive officer of any bank, or with any executive officer or employee, designated by such chief executive officer, of—

(a)that bank;

(b)any subsidiary or controlling company of that bank, or any other subsidiary of such controlling company;

(c)any juristic person which would have been a subsidiary of that bank or of its controlling company had such juristic person been a company;

(d)any juristic person of which the board of directors or, in the case where such juristic person is not a company, of which the governing body is accustomed to act in accordance with the directions or instructions of that bank or its controlling company; or

(e)any trust controlled directly or indirectly by that bank or its controlling company,

with a view to achieving effective supervision by the Registrar, on an individual or a consolidated basis, of that bank or the group of banks of which that bank is a member.[subsection (3) amended by section 25(b) of Act 9 of 1993 and substituted by section 3 of Act 26 of 1994]

(4)The Registrar may from time to time by means of a circular furnish banks with guide-lines regarding the application and interpretation of the provisions of this Act or provide banks with any other information.[subsection (4) substituted by section 3(c) of Act 19 of 2003]

7. Furnishing of information by banks

(1)The Registrar may by notice in writing—

(a)direct a bank or a controlling company or a subsidiary of a bank or controlling company to furnish the Registrar, at such time or times or at such intervals or in respect of such period or periods as may be specified in the notice, with such information as may be specified in the notice and as the Registrar may reasonably require for the performance of his or her functions under this Act; or[paragraph (a) substituted by section 4(a) of Act 19 of 2003]

(b)direct such bank, controlling company or subsidiary to furnish the Registrar with a report by a public accountant as defined in section 1 of the Public Accountants' and Auditors' Act, 1991 (Act No. 80 of 1991), or by any other person with appropriate professional skill, on any matter, or any aspect of any matter, about which the Registrar has directed or may direct under paragraph (a) the bank, controlling company or subsidiary to furnish information.[paragraph (b) substituted by section 3 of Act 9 of 1993]

(1A)The report required by the Registrar under paragraph (b) shall be drawn up at the expense of the bank, controlling company or subsidiary in question.[subsection (1A) inserted by section 4(b) of Act 19 of 2003]

(2)The public accountant or other person appointed by a a bank, controlling company or subsidiary to make a report required under subsection (1)(b), shall be a person designated or approved by the Registrar, and the Registrar may require the relevant report to be in such form as may be specified in the notice referred to in subsection (1).

(3)No due diligence audit of the financial condition of any bank shall be conducted without the Registrar first having been notified in writing of the intention to do so.[subsection (3) added by section 3 of Act 36 of 2000]

(4)The person at whose request a due diligence audit of the financial condition of a bank has been conducted shall furnish the Registrar with a copy of the audit report.[subsection (4) added by section 3 of Act 36 of 2000]

(5)No person shall without the written consent of the Registrar disclose to any other person, except to the bank whose financial condition was the subject of the due diligence audit, any information contained in a report referred to in subsection (4).[subsection (5) added by section 3 of Act 36 of 2000]

8. Power of Registrar to extend certain periods

(1)Any person who is required to submit to the Registrar or to furnish the Registrar with any return, statement, report or other document or information within a period determined by or under this Act, may before or after the expiry of that period apply to the Registrar in writing for an extension of that period.

(2)The Registrar may, after consideration of an application referred to in subsection (1)—

(a)grant the application and extend by such period as he or she may determine the period within which the return, statement, report or other document or information had to be submitted or furnished; or

(b)refuse the application,

and shall in writing notify the person who lodged the application of the Registrar’s decision.[subsection (2) substituted by section 5 of Act 19 of 2003]

9. Review of decisions of Registrar

(1)Any person aggrieved by a decision taken by the Registrar under a provision of this Act may within the prescribed period and in the prescribed manner and upon payment of the prescribed fees apply for a review of that decision by the board of review established by subsection (2).

(2)For the purpose of this Act, there is hereby established a board of review which shall consist of three members, appointed by the Minister and of whom—

(a)one shall be appointed on account of his or her knowledge of law and shall be the chairperson;[paragraph (a) substituted by section 6(a) of Act 19 of 2003]

(b)one shall be a person who in the opinion of the Minister has wide experience of, and is knowledgeable about the latest developments in, the banking industry; and

(c)one shall be a person registered as an accountant and auditor under section 15 of the Public Accountants' and Auditors' Act, 1991 (Act No. 80 of 1991), and who in the opinion of the Minister has wide experience of, and is knowledgeable about the latest developments in, the accountants' and auditors' profession.

(2A)In any review under subsection (1), the board of review is, subject to the provisions of subsection (8), confined to establishing whether or not, in the taking of the relevant decision, the Registrar exercised his or her discretion properly and in good faith.[subsection (2A) substituted by section 6(b) of Act 19 of 2003]

(3)[subsection (3) omitted by section 4 of Act 36 of 2000]

(4)If before or during any review under subsection (1) it transpires that any member of the board of review has any direct or indirect personal interest in the outcome of that review, such member shall recuse himself or herself and such member shall be replaced by a person temporarily appointed, subject to the provisions of subsection (2), by the Minister for the purposes of the review.[subsection (4) substituted by section 6(c) of Act 19 of 2003]

(4A)If before or during any review under subsection (1), it transpires that any member of the board of review will, due to illness, absence from the Republic or for any other bona fide reason be unable to participate or continue to participate in that review, such member shall be replaced by a person temporarily appointed, subject to the provisions of subsection (2), by the Minister for the purposes of the review.[subsection (4A) substituted by section 6(d) of Act 19 of 2003]

(5)A member of the board of review shall hold office for a period of three years and shall on the expiration of such member’s term of office be eligible for reappointment.[subsection (5) substituted by section 6(e) of Act 19 of 2003]

(6)Any casual vacancy that occurs on the board of review shall be filled by the appointment by the Minister, subject to the provisions of subsection (2), of another member, and any person so appointed shall hold office for the unexpired portion of the period of office of the predecessor of such member.[subsection (6) substituted by section 6(f) of Act 19 of 2003]

(7)A review under subsection (1) shall take place on the date and at the place and time fixed by the board of review, which shall give notice in writing the applicant as well as the Registrar thereof.

(8)The board of review may for the purposes of a review under subsection (1)—

(a)summon any person who, in its opinion, may be able to give material information for the purposes of the review or who it believes has in his or her possession or custody or under his or her control any document which has any bearing upon the decision under review, to appear before it at a time and place specified in the summons, to be interrogated or to produce that document, and retain for examination any document so produced;[paragraph (a) substituted by section 6(g) of Act 19 of 2003]

(b)administer an oath to or accept an affirmation from any person called as a witness at the review, and

(c)call any person present at the review proceedings as a witness and interrogate such person and require such person to produce any document in his or her possession or custody or under his or her control, and such a person shall be entitled to legal representation at his or her own expense.[paragraph (c) substituted by section 6(h) of Act 19 of 2003]

(9)Subject to the provisions of subsection (2A), the procedure at the review shall be determined by the chairperson of the board of review.[subsection (9) substituted by section 6(i) of Act 19 of 2003]

(10)The board of review may after the review confirm, set aside or vary the relevant decision of the Registrar.

(11)The decision of a majority of the members of the board of review shall be the decision of that board.

(12)The decision of the board of review shall be in writing, and a copy thereof shall be furnished to the applicant as well as to the Registrar.

(13)If the board of review sets aside any decision by the Registrar, the prescribed fees paid by the applicant in respect of the review in question shall be refunded to the applicant, and if the board of review varies any such decision, it may in its discretion direct that the whole or any part of such fees be refunded to the applicant.[subsection (13) substituted by section 6(j) of Act 19 of 2003]

(14)A member of the board of review shall in respect of his or her services as such a member be paid such remuneration, including reimbursement for transport, travelling and subsistence expenses incurred by him or her in the performance of his or her functions as such a member, as the Minister may from time to time determine.[subsection (14) substituted by section 6(k) of Act 19 of 2003]

[section 9 amended by section 2 of Act 42 of 1992, by section 4(a) and 4(b) of Act 9 of 1993, by section 4(c) of Act 26 of 1994 and substituted by section 4 of Act 36 of 2000]

10. Annual report by Registrar

(1)The Registrar shall annually submit to the Minister a report on his or her activities in terms of this Act during the year under review.[subsection (1) substituted by section 7 of Act 19 of 2003]

(2)The Minister shall lay a copy of the report referred to in subsection (1) upon the Tables in Parliament within 14 days after receipt of such report, if Parliament is then in ordinary session, or, if Parliament is not then in ordinary session, within 14 days after the commencement of its next ensuing ordinary session.

Chapter III
Authorization to establish, and registration and cancellation of registration of banks

11. Registration a prerequisite for conducting business of bank

(1)Subject to the provisions of section 18A, no person shall conduct the business of a bank unless such person is a public company and is registered as a bank in terms of this Act.[subsection (1) substituted by section 5 of Act 26 of 1994]

(2)Any person who contravenes a provision of subsection (1) shall be guilty of an offence.

12. Application for authorization to establish bank

(1)Any person who wishes to conduct the business of a bank may apply to the Registrar for authorization to establish such a bank.[subsection (1) amended by section 25(c) of Act 9 of 1993]

(2)An application under subsection (1)—

(a)shall be made in the manner and on the form prescribed in the Regulations relating to Banks; and

(b)shall be accompanied by a statement containing the information prescribed in the Regulations relating to Banks.

[subsection (2) substituted by section 8(a) of Act 19 of 2003]

(3)The Registrar may require an applicant contemplated in subsection (1) to furnish him or her with—

(a)such information or documents, in addition to information and documents furnished by the applicant in terms of subsection (2); or

(b)a report by a public accountant as defined in section 1 of the Public Accountants' and Auditors' Act, 1991 (Act No. 80 of 1991), or by any other knowledgeable person approved by the Registrar, on such aspects relating to the application in question,[paragraph (b) substituted by section 5 of Act 9 of 1993]

as the Registrar may deem necessary.[subsection (3) amended by section 8(b) of Act 19 of 2003]

13. Granting or refusal of application for authorization

(1)Subject to the provisions of subsection (2), the Registrar may, after considering all information, documents and reports furnished to him or her for the purposes of an application under section 12, grant or refuse the relevant application or grant the application subject to such conditions as he or she may determine.[subsection (1) substituted by section 9(a) of Act 19 of 2003]

(2)The Registrar shall not grant an application made under section 12 unless he or she is satisfied—

(a)that the establishment of the proposed bank will be in the public interest;

(b)that the business the applicant proposes to conduct, is that of a bank ;

(c)that the applicant will conduct the proposed business of a bank in the capacity of a public company incorporated and registered under the Companies Act;

(d)that the applicant will be able to establish itself successfully as a bank ;

(e)that the applicant will have the financial means to comply, in the capacity of a bank, with the requirements of this Act;

(f)that the business of the proposed bank will be conducted in a prudent manner;

(fA)that every person who is to be a director or an executive officer of the proposed bank is, as far as can reasonably be ascertained, a fit and proper person to hold the office of such director or executive officer;[paragraph (fA) inserted by section 6(a) of Act 9 of 1993]

(g)that every person who is to be an executive officer of the proposed bank has sufficient experience of the management of the kind of business it is intended to conduct; and

(h)that the composition of the board of directors of the proposed bank will be appropriate having regard to the nature and scale of the business it is intended to conduct.

[subsection (2) amended by section 9(b) of Act 19 of 2003]

(3)When the Registrar grants or refuses an application made under section 12, he or she shall give written notice of that fact to the applicant concerned.[subsection (3) substituted by section 9(c) of Act 19 of 2003]

(4)[subsection (4) deleted by section 6(b) of Act 9 of 1993]

14. Revocation of authorization

(1)The Registrar may at any time prior to the registration, in terms of section 17, of a bank, revoke the authorization granted for the establishment of such a bank if the Registrar is satisfied that—

(a)false or misleading information was furnished in the application for such authorization; or

(b)success has not been achieved within a period of 12 months as from the date of the granting of the said authorization, with the formation, in accordance with the proposals contained in the application for the said authorization, of the proposed bank.[paragraph (b) substituted by section 10(a) of Act 19 of 2003]

[subsection (1) amended by section 25(c) of Act 9 of 1993 and by section 6 of Act 26 of 1994]

(2)When the Registrar revokes an authorization in terms of subsection (1), he or she shall give written notice of that fact to the person to whom the authorization was granted.[subsection (2) substituted by section 10(b) of Act 19 of 2003]

15. Formation of certain companies prohibited except with approval of Registrar

(1)No public company shall without the written approval of the Registrar be formed in terms of the Companies Act to conduct the business of a bank in accordance with the provisions of this Act.

(2)The Registrar shall grant the approval referred to in subsection (1) only if he or she is of the opinion that the company concerned will probably, having regard to the provisions of section 17, be eligible for registration as a bank in terms of this Act.[subsection (2) substituted by section 7 Act 26 of 1994 and section 11 of Act 19 of 2003]

(3)Notwithstanding anything to the contrary contained in the Companies Act, the Registrar of Companies shall not register in terms of that Act the memorandum of association and articles of association of a public company formed for the purpose of conducting the business of a bank, unless the application for such registration is accompanied by the approval referred to in subsection (1).

16. Application for registration as bank

(1)An applicant to whom the Registrar has under section 13 granted authorization for the establishment of a bank (hereinafter in this Chapter referred to as the institution) may at any time during the period of 12 months commencing on the date of the granting of the said authorization apply to the Registrar for the registration of the institution as a bank, provided such authorization has not been revoked in terms of section 14 (1).

(2)An application under subsection (1) shall—

(a)be made in the manner and on the form prescribed in the Regulations relating to Banks; and[paragraph (a) substituted by section 12(a) of Act 19 of 2003]

(b)be accompanied by—

(i)two copies each of the institution's memorandum of association and articles of association;

(ii)a written statement in which is set out—

(aa)the full and the abbreviated name of the institution as well as the literal translations thereof;

(bb)the address of the institution's head office as well as its postal address;

(cc)full particulars of the business the applicant proposes to conduct and of the manner in which it proposes to conduct such business; and

(dd)the full names and the addresses of the chairperson, the other directors and the executive officers of the institution; and[subparagraph (dd) substituted by section 12(b) of Act 19 of 2003]

(iii)a list of shareholders in the institution, as at the date of the application, drawn up in accordance with the requirements with which a return referred to in section 59 has to comply.

(3)The Registrar may require an applicant contemplated in subsection (1) to furnish him or her with such information or documents, in addition to information and documents furnished by the applicant in terms of subsection (2), as the Registrar may deem necessary; and[subsection (3) substituted by section 12(c) of Act 19 of 2003]

(4)The application and every document lodged in terms of subsection (2) or (3) shall be signed by the chairperson or the chief executive officer of the institution.[subsection (4) substituted by section 12(d) of Act 19 of 2003]

[section (16) substituted by section 8 of Act 26 of 1994]

17. Granting or refusal of application for registration

(1)Subject to the provisions of subsection (2), the Registrar shall, after considering all information and documents furnished to him or her in terms of section 16 for the purposes of an application under that section, grant such application if he or she is satisfied—

(a)that the business the applicant proposes to conduct is that of a bank;

(b)that the applicant does not propose to adopt undesirable methods of conducting business; and

(c)that the memorandum of association and articles of association of the institution are consistent with this Act and are not undesirable for any reason.

[subsection (1) amended by section 13(a) of Act 19 of 2003]

(2)Notwithstanding the provisions of subsection (1), the Registrar may refuse an application for the registration of an institution as a bank if he or she is of the opinion—

(a)that any of the requirements specified in section 13 (2) is no longer complied with by or in respect of the institution concerned;

(b)that the institution concerned, when registered as a bank, will probably not be able to comply with a provision of this Act, or is likely to pursue a practice contrary to a provision of this Act;

(c)that an interest which any person has in the institution concerned is inconsistent with a provision of this Act;

(d)that the interests of potential depositors with the institution concerned will be detrimentally affected by the manner in which the institution proposes to conduct its business, or for any other reason;

(e)that the name of the institution concerned—

(i)is identical with a name under which an existing bank or a mutual bank has already been registered;

(ii)so closely resembles the name of an existing bank or mutual bank that the one is likely to be mistaken for the other;

(iii)is identical with, or closely resembles, the name under which any bank or any other institution which was registered under any law repealed by this Act, or any mutual bank, was previously registered and that reasonable ground for objection against the use of that name by the institution concerned exists; or

(iv)is likely to mislead the public; or

(f)that the application does not comply with a requirement of this Act.

[subsection (2) amended by section 13(b) of Act 19 of 2003]

(3)When the Registrar in terms of this section grants or refuses an application for registration, he or she shall give written notice of that fact to the applicant concerned.[subsection (3) substituted by section 13(c) of Act 19 of 2003]

(4)If the Registrar in terms of this section grants an application for registration he or she shall, subject to the provisions of section 18, and on payment by the applicant of the prescribed registration fee, provisionally register the institution concerned as a bank and issue to the institution, on the prescribed form, a certificate of registration as a bank.[subsection (4) substituted by section 13(d) of Act 19 of 2003]

(5)An institution which is for the first time registered as a bank shall not commence doing the business of a bank until it has furnished proof to the Registrar that it complies with the provisions of section 70.

(6)An institution which contravenes the provisions of subsection (5) shall be guilty of an offence.

[section 17 substituted by section 9 of Act 26 of 1994]

18. Conditions of registration

(1)The registration under section 17 of an institution as a bank shall be subject to the prescribed conditions and to such further conditions, if any, as the Registrar may determine.

(2)In addition to any other condition which the Registrar may impose under subsection (1) he or she may impose a condition requiring the institution concerned to take within a specified period such steps in terms of the Companies Act as may be necessary to alter its memorandum of association or articles of association in accordance with the requirements of the Registrar.[subsection (2) substituted by section 14 of Act 19 of 2003]

[section 18 substituted by section 10 of Act 26 of 1994]

18A. Branches of foreign institutions

(1)An institution which has been established in a country other than the Republic and which lawfully conducts in such other country a business similar to the business of a bank (hereinafter in this section referred to as the foreign institution) may, notwithstanding the provisions of section 11(1), with the prior written authorization of the Registrar and subject to the prescribed conditions and to such further conditions, if any, as the Registrar may determine, conduct the business of a bank by means of a branch in the Republic.

(2)To obtain the authorization of the Registrar as contemplated in subsection (1), the foreign institution concerned shall in the manner and on the form prescribed in the Regulations relating to branches lodge with the Registrar a written application which shall be accompanied by—

(a)a written statement containing the prescribed information; and

(b)the prescribed fee.

[subsection (2) amended by section 15(a) of Act 19 of 2003]

(3)The Registrar may require the foreign institution applying in terms of subsection (2) to furnish him or her with—

(a)such information or documents, in addition to information and documents furnished by the foreign institution in terms of subsection (2); or

(b)such further information with regard to the nature and extent of supervision exercised or to be exercised by the responsible supervisory authority of the foreign institution’s country of domicile in respect of—

(i)the proposed branch in the Republic;

(ii)the foreign institution itself; or

(iii)any group of institutions of which the foreign institution may form a part,

as the Registrar may deem necessary.

[subsection (3) amended by section 15(b) of Act 19 of 2003]

(4)When the Registrar grants or refuses an application in terms of subsection (2) for authorization to conduct the business of a bank by means of a branch in the Republic, he or she shall give written notice of that fact to the applicant concerned.[subsection (4) substituted by section 15(c) of Act 19 of 2003]

(5)The Registrar shall not grant an application in terms of subsection (2) unless he or she is satisfied that proper supervision as contemplated in subsection (3)(b) is or will be exercised by the responsible supervisory authority of the foreign institution’s country of domicile.[subsection (5) substituted by section 15(d) of Act 19 of 2003]

(6)If the Registrar grants an application referred to in subsection (4) he or she shall on the prescribed form issue to the foreign institution concerned a certificate of authorization to conduct the business of a bank by means of a branch in the Republic.[subsection (6) substituted by section 15(e) of Act 19 of 2003]

(7)Any foreign institution that conducts the business of a bank by means of a branch in the Republic without having obtained the Registrar’s written authorization referred to in subsection (1) shall be guilty of an offence.

[section 18A inserted by section 11 of Act 26 of 1994]

18B. Cancellation or suspension of authorization by Registrar and notice by Registrar of intention to cancel or suspend authorization

(1)The Registrar may, subject to the provisions of subsections (2) and (3), in the case of a foreign institution that, under an authorization referred to in section 18A, conducts the business of a bank by means of a branch in the Republic, with the consent of the Minister and by notice in writing to the foreign institution concerned cancel, or suspend on such conditions as the Registrar may deem fit, such authorization if the foreign institution concerned has failed to comply with a prescribed condition or a further condition, contemplated in section 18A(1), to which its authorization is subject.

(2)The Registrar shall, before cancelling or suspending under subsection (1) the authorization of a foreign institution referred to in subsection (1), in a written notice addressed to the foreign institution concerned—

(a)inform the foreign institution of his or her intention to cancel or suspend, as the case may be, such authorization;[paragraph (a) substituted by section 16(a) of Act 19 of 2003]

(b)furnish the foreign institution with the reasons for the intended cancellation or suspension; and

(c)call upon the foreign institution to show cause within a period specified in the notice, which shall not be less than 30 days as from the date of the notice, why its authorization should not be so cancelled or suspended.

(3)After considering any representations received within the specified period from the foreign institution concerned by virtue of the provisions of subsection (2)(c), the Registrar may in his or her discretion—

(a)proceed with the cancellation or suspension in terms of subsection (1) of the authorization; or

(b)refrain from taking any further steps in terms of subsection (1), and the Registrar shall in writing inform the foreign institution concerned of his or her decision in terms of this subsection.

[subsection (3) substituted by section 16(b) of Act 19 of 2003]

[section 18B inserted by section 11 of Act 26 of 1994]

19. ***

[section 19 repealed by section 12 of Act 26 of 1994]

20. ***

[section 20 repealed by section 13 of Act 26 of 1994]

21. Untrue information in connection with applications

Any person who in or in connection with—

(a)an application for authorization to establish a bank or;[paragraph (a) amended by section 14(a) of Act 26 of 1994]

(b)an application for registration as a bank,[paragraph (b) substituted by section 14(b) of Act 26 of 1994]

(c)[paragraph (c) deleted by section 14(c) of Act 26 of 1994]

furnishes the Registrar with any information which to the knowledge of such person is untrue or misleading in any material respect, shall be guilty of an offence.

22. Use of name of bank

(1)Subject to the provisions of subsection (2), an institution which is registered as a bank or a foreign institution which is authorized under section 18A to conduct the business of a bank by means of a branch in the Republic or an institution which is registered as a representative office of a foreign institution under section 34 shall not—

(a)in the case of such bank use, or refer to itself by, a name other than the name under which it is so registered; or

(b)in the case of such foreign institution, in respect of the branch concerned use, or refer to the branch by, a name other than the name under which the conduct of the business of a bank in the Republic was so authorized,

or any literal translation or abbreviation of such name which has been approved by the Registrar: Provided that the Registrar may, if he or she deems it desirable, authorize the use of a name by which such bank or foreign institution is otherwise generally known.[subsection (1) substituted by substituted by section 15(a) of Act 26 of 1994, by section 5 of Act 36 of 2000 and by section 17(a) of Act 19 of 2003]

(2)An institution which is registered as a bank may, with the consent of the Registrar, in conjunction with its registered name or the name of which the use was authorized by the Registrar under the proviso to subsection (1) use, or refer to itself by, the name of another bank with which it has amalgamated or all the assets and liabilities of which have, as contemplated in section 54(1), been transferred to it or, in the case of a change of name, the name by which it was previously known.[subsection (2) substituted by section 5 of Act 36 of 2000]

(2A)A bank may, with the prior written consent of the Registrar, in conjunction with its registered name, and subject to such conditions as the Registrar may determine, use or refer to a name of a division, brand or product of that bank, which name includes the word ‘bank’ or any derivative thereof.[subsection (2A) inserted by section 17(b) of Act 19 of 2003]

(3)An institution which contravenes the provisions of subsection (1) shall be guilty of an offence.

(4)Any person who, in connection with any business conducted by such person—

(a)uses any name, description or symbol indicating, or calculated to lead persons to infer, that such person is a bank registered as such under this Act; or

(b)in any other manner purports to be a bank registered as such under this Act,

while such person is not so registered as a bank, shall be guilty of an offence.[subsection (4) substituted by section 15(b) of Act 26 of 1994 and by section 17(c) of Act 19 of 2003]

(5)No person shall use in respect of any business a name or description which includes the word “bank”, or any derivative thereof, or the words “deposit-taking institution” or “building society”, or any derivative thereof, unless—

(a)the business in question is a bank or a foreign institution which is authorised under section 18A to conduct the business of a bank by means of a branch in the Republic or an institution that is registered as a representative office of a foreign institution under section 34; or[paragraph (a) substituted by section 17(d) of Act 19 of 2003]

(b)the business in question is registered as a controlling company in respect of a bank under this Act and the name or description in question is so used for the purpose of indicating the connection between the two companies concerned; or

(c)such name or description is composed of words which include the word "bank" as part of a place-name or a personal name,

and the Registrar has in writing authorized such person so to use such name or description.[subsection (5) amended by section 7(a) of Act 9 of 1993]

(6)Notwithstanding the prohibition contained in subsection (5), a company—

(a)of which the formation has been approved by the Registrar in terms of section 15, may be formed under a name which includes the word “bank” or the words “deposit-taking institution” or “building society”, or a derivative thereof; or

(b)whose application for registration as a bank has been granted by the Registrar under section 17 and which has not been formed in accordance with paragraph (a) of this subsection under a name which already includes the word “bank” or the words “deposit-taking institution” or “building society”, or a derivative thereof, may before its registration take the necessary steps in accordance with the Companies Act to include such word, words or derivative in its name.[paragraph (b) substituted by section 15(d) of Act 26 of 1994]

[subsection (6) substituted by section 7(b) of Act 9 of 1993]

(7)The Registrar may in writing direct a company referred to in subsection (6) whose name includes the word "bank" or the words “deposit-taking institution” or "building society" or any derivative thereof, to remove such word, words or derivative from its name—

(a)in the case of a company referred to in paragraph (a) of that subsection, if it fails to apply in terms of section 16 (1) for registration as a bank within the period of 12 months referred to in that section, or if its application for such registration is refused under section 17; and

(b)in the case of a company referred to in paragraph (b) of that subsection, if it fails to comply, within a reasonable time after its application for registration has been granted under section 17, with the conditions subject to which it was registered.

[subsection (7) amended by section 7(c) of Act 9 of 1993 and substituted by section 15(e) of Act 26 of 1994]

(8)Any person who contravenes any provision of subsection (5) or refuses or fails to comply with a direction under subsection (7) shall be guilty of an offence.

(9)The provisions of subsection (5) shall not be construed as prohibiting the use in respect of any company, society, firm, business or undertaking of any name, style or description which immediately prior to the commencement of this Act was lawfully so used in terms of the provisions of any law repealed by this Act.

23. Cancellation or suspension of registration by Registrar

(1)The Registrar may, subject to the provisions of section 24, in the ease of a bank registered as such, with the consent of the Minister and by notice in writing to the institution concerned cancel, or suspend on such conditions as the Registrar may deem fit, such registration if the institution has not conducted any business as a bank during the period of six months commenting on the date on which the institution was registered as a bank.

(2)The Registrar may, subject to the provisions of section 24, in the case of a bank registered as such, with the consent of the Minister and by notice in writing to the institution concerned cancel, or suspend on such conditions as the Registrar may deem fit, such registration if—

(a)it has, in the opinion of the Registrar, been obtained on the strength of untrue or misleading information furnished by any person and such person has, on account of having so furnished such information, been convicted of an offence in terms of section 21;

(b)in the case of a bank of which the main place of business is situated in a country other than the Republic, the authorization in terms of which the institution concerned is authorized to conduct business in such other country similar to the business of a bank, is revoked by the competent authority in such other country; or

(c)the institution concerned has failed to comply—

(i)with a prescribed condition or a further condition, contemplated in section 18(1), to which its registration is subject; or

(ii)with a condition imposed by the Registrar under section 18(2).

(3)The Registrar may, subject to the provisions of section 24, in the case of a bank registered as such, with the consent of the Minister and by notice in writing to the institution concerned cancel such registration if the institution has ceased to conduct the business of a bank or is no longer in operation.

[section 23 substituted by section 16 of Act 26 of 1994]

24. Notice by Registrar of intention to cancel or suspend registration

(1)The Registrar shall, before cancelling or suspending under section 23 the registration of a bank, in a written notice addressed to the chairperson or chief executive officer of the institution concerned—

(a)inform the institution of his or her intention to cancel or suspend, as the case may be, such registration;[subsection (1) substituted by section 18(a) of Act 19 of 2003]

(b)furnish the institution with the reasons for the intended cancellation or suspension; and

(c)call upon the institution to show cause within a period specified in the notice, which shall not be less than 30 days as from the date of the notice, why its registration should not be so cancelled or suspended.[paragraph (c) substituted by section 17(b) of Act 26 of 1994]

[subsection (1) amended by section 17(a) of Act 26 of 1994 and by section 18(a) of Act 19 of 2003]

(2)After considering any representations received within the specified period from the institution concerned by virtue of the provisions of subsection (1)(c), the Registrar may in his or her discretion—

(a)proceed with the cancellation or suspension, in terms of section 23, of the registration; or

(b)refrain from taking any further steps in terms of section 23,

and the Registrar shall in writing inform the chairperson or chief executive officer of the institution concerned of his or her decision in terms of this subsection.[subsection (2) substituted by section 18(b) of Act 19 of 2003]

25. Cancellation or suspension of registration by court

(1)The Registrar may by way of application on notice of motion apply to a competent court for an order cancelling or suspending the registration of a bank if in the opinion of the Registrar there exist grounds, other than the grounds referred to in section 23, justifying such cancellation or suspension.[subsection (1) substituted by section 18(a) of Act 26 of 1994]

(2)A competent court for the purposes of subsection (1) shall be any division of the High Court of South Africa within the area of jurisdiction of which the registered office, referred to in section 170 of the Companies Act, of the bank concerned is situated.[subsection (2) substituted by section 19 of Act 19 of 2003]

(3)The court entertaining an application made under subsection (1) shall enquire into and consider the matter and shall grunt or refuse the application, and may make such order as to costs as it may deem fit.

(4)In addition to any other grounds which the court may consider sufficient to justify the granting of an order under subsection (1) cancelling or suspending the registration of a bank, such an order may also be granted if the institution concerned—

(a)has, or any of its directors or executive officers has, been convicted of any offence in terms of this Act;

(b)does not carry on satisfactorily the business of a bank;

(c)has failed to comply with a requirement of this Act which is applicable to it in its capacity as a registered bank;[paragraph (c) substituted by section 18(c) of Act 26 of 1994]

(d)continues to employ an undesirable practice; or

(e)has in a material respect misrepresented the facilities which it offers to the general public,

or if, on any other ground advanced by the Registrar in the relevant application, the court is of the opinion that it is not in the public interest to allow the institution concerned to continue its activities as a bank.[subsection (4) amended by section 18(b) of Act 26 of 1994]

26. Restriction by Registrar of activities of bank

(1)The Registrar may, in lieu of an application under section 25 (1), by written notice to a bank in respect of which, in the opinion of the Registrar, any of the circumstances mentioned in paragraphs (a) to (e), inclusive, of section 25 (4) is present, restrict the activities of the institution concerned as a bank in such respects and on such conditions as the Registrar may specify in the notice.[subsection (1) substituted by section 19 of Act 26 of 1994]

(2)The provisions of section 24 shall mutatis mutandis apply in respect of the restriction of the activities of a bank by the Registrar under subsection (1).

27. Cancellation of registration at request of bank

The Registrar shall cancel the registration of a bank upon submission to him or her by the institution concerned of a special resolution contemplated in section 200 of the Companies Act authorizing such cancellation.[section 27 substituted by section 20 of Act 26 of 1994 and by section 20 of Act 19 of 2003]

28. Cancellation of registration upon winding-up

When the affairs of a bank have been completely wound up as contemplated in section 419(1) of the Companies Act, the responsible Master of the High Court shall transmit to the Registrar a copy of the certificate referred to in that section, and the Registrar shall upon receipt of such copy cancel the registration of the bank concerned.[section 28 substituted by section 21 of Act 26 of 1994 and by section 21 of Act 19 of 2003]

29. Withdrawal of suspension or restriction

(1)The Registrar may on the written application of a bank of which—

(a)the registration was suspended under section 23; or[paragraph (a) substituted by section 22(a) of Act 26 of 1994]

(b)the activities were restricted under section 26,

by written notice to the institution concerned withdraw such suspension or restriction, as the case may be, provided the Registrar is satisfied that the institution has complied with all requirements for such withdrawal imposed by the Registrar in the conditions of suspension or restriction.

(2)Application for an order discharging an order under section 25 whereby the registration of a bank has been suspended by the court, may be made to the competent court referred to in section 25 (2).[subsection (2) substituted by section 22(b) of Act 26 of 1994]

30. Publication of information relating to banks and representative offices of foreign institutions

The Registrar shall publish a notice in the Gazette—

(a)of every—

(i)registration of an institution as a bank;[subparagraph (i) substituted by section 23(a) of Act 26 of 1994]

(ii)cancellation or suspension of the registration of a bank;[subparagraph (ii) substituted by section 23(b) of Act 26 of 1994]

(iii)[subparagraph (iii) deleted by section 23(c) of Act 26 of 1994]

(iv)restriction of the activities of a bank;

(v)withdrawal of such suspension or restriction; or

(vi)change of the name of a bank;

which is effected or which takes place in terms of this Act;[paragraph (a) amended by section 23(d) of Act 26 of 1994]

(b)of every consent to the establishment in the Republic of a representative office of a foreign institution which has been granted by the Registrar in terms of section 34; and[paragraph (b) substituted by section 23(e) of Act 26 of 1994 and by section 22 of Act 19 of 2003]

(c)of every authorization to conduct the business of a bank by means of a branch in the Republic which has been granted by the Registrar to a foreign institution under section 18A.[paragraph (c) added by section 23(f) of Act 26 of 1994 and substituted by section 22 of Act 19 of 2003]

[section 30 substituted by section 8 of Act 9 of 1993]

31. Date on which registration lapses

An institution registered as a bank shall cease to be registered as such—

(a)[paragraph (a) deleted by section 24 of Act 26 of 1994]

(b)in the case of a registration cancelled by the Registrar under section 23, upon expiry of 30 days after the date of the notice referred to in subsection (1), (2) or (3) of that section or, if an application for the review of such a decision to cancel was lodged with the board of review in terms of section 9 before the expiry of the said 30 days and the board of review has confirmed such cancellation, upon the date on which the institution concerned is notified of such confirmation;[paragraph (b) substituted by section 6 of Act 36 of 2000]

(c)in the case of a registration in respect of which the court has granted an order under section 25 cancelling the registration, upon the date on which that order comes into force; or

(d)in the case of a registration cancelled by the Registrar in terms of section 27 or 28, upon such date as may be determined by the Registrar.

32. Repayment of deposits upon lapse of registration

(1)Whenever an institution which is registered as a bank ceases to be registered as such, the Registrar may in writing order that institution—

(a)to repay, in accordance with such directions and within such period as may be specified in the order, all money due by it to members of the public in respect of deposits accepted by it while registered as a bank, including any interest or any other amounts owing by it in respect of such money; and

(b)to change its name and its memorandum of association and articles of association within the period and in the manner required by the Registrar.

[subsection (1) amended by section 25 of Act 26 of 1994]

(2)Different directions and periods may under subsection (1) be determined in respect of different kinds of deposits: Provided that in determining such directions and periods no preference shall be given to any such member of the public which such person does not in law enjoy.[subsection (2) substituted by section 23 of Act 19 of 2003]

(3)An institution which by virtue of the provisions of subsection (1) repays a deposit before the due date agreed for the repayment thereof, shall not be bound to pay any interest or any other amounts which would have been payable in respect of such deposit for the period from the date of such repayment up to such due date.

(4)Any institution which fails to comply with an order under subsection (1) shall—

(a)be guilty of an offence; and

(b)for the purposes of sections 344 and 345 of the Companies Act be deemed not to be able to pay its debts.

33. Reregistration in terms of this Act

(1)Every institution which on the date immediately preceding the date of commencement of the Deposit-taking Institutions Amendment Act, 1993 (hereinafter in this section referred to as the Amendment Act), is deposit-taking institution that has been provisionally or finally registered as such under the provisions of this Act as those provisions existed prior to the amendment thereof by the Amendment Act shall, in accordance with and subject to the provisions of subsections (2) and (3)—

(a)in the case of an institution that has so been provisionally registered as a deposit-taking institution, be provisionally registered as a bank; and

(b)in the case of an institution that has so been finally registered as deposit-taking institution, be finally registered as a bank,

by the Registrar in terms of the provisions of this Act as so amended, as soon as is practicable after the said date of commencement.

(2)The Registrar shall when complying with the provisions of subsection (1) issue to the institution in question a certificate of provisional or final registration as a bank, as the case may be.

(3)The reregistration of an institution in terms of this section shall in the case of a provisional registration be for the unexpired portion of the period of the institution's former provisional registration as a deposit-taking institution.

(4)Upon the reregistration of an institution in terms of this section its previous registration as a deposit-taking institution shall be deemed to have lapsed and any certificate of registration issued in respect thereof shall be deemed to have been cancelled.

(5)No fees shall be payable in respect of a reregistration in terms of this section.

[section 33 substituted by section 9 of Act 9 of 1993]

33A. Reregistration after commencement of Banks Amendment Act, 1994

(1)Every institution which on the date immediately preceding the date of commencement of the Banks Amendment Act, 1994 (hereinafter in this section referred to as the Amendment Act), is a bank that has been provisionally or finally registered as such under the provisions of this Act as those provisions existed prior to the amendment thereof by the Amendment Act shall, in accordance with and subject to the provisions of subsections (2) and (3), be reregistered as a bank by the Registrar in terms of the provisions of this Act as so amended, as soon as is practicable after the said date of commencement.

(2)The Registrar shall, when complying with the provisions of subsection (1), issue to the institution in question a certificate of registration as a bank.

(3)The reregistration of an institution in terms of this section shall be subject mutatis mutandis to the provisions of section 18.

(4)Upon the reregistration of an institution in terms of this section its previous provisional or final registration as a bank, as the case may be, shall be deemed to have lapsed and any certificate of registration issued in, respect thereof shall be deemed to have been cancelled.

(5)No fees shall be payable in respect of a reregistration in terms of this section.

[section 33A inserted by section 26 of Act 26 of 1994]

34. Representative offices of foreign institutions

(1)An institution which has been established in a country other than the Republic and which lawfully conducts in such other country a business similar to the business of a bank (hereinafter in this section referred to as a foreign institution), may not establish a representative office in the Republic without having previously obtained the written consent of the Registrar.

(2)The consent referred to in subsection (1) shall be obtained by way of a written application to the Registrar in which is specified—

(a)the name of the foreign institution;

(b)the country in which it is established;

(c)the name of its proposed chief representative officer in the Republic; and

(d)the address of its proposed representative office in the Republic,

and the application shall be accompanied by the prescribed fee and a certificate of the competent authority in the other country in question to the effect that the foreign institution concerned is by or under the laws of that other country authorized to conduct a business in such country similar to the business of a bank.[subsection (2) amended by section 27(a) of Act 26 of 1994]

(2A)A foreign institution applying in terms of subsection (2) may be required by the Registrar to furnish him or her with such information and documents as he or she may deem necessary, over and above any information and documents which have been furnished by such foreign institution by virtue of that subsection.[subsection (2A) inserted by section 27(b) of Act 26 of 1994, substituted by section 2(a) of Act 55 of 1996 and by section 24(a) of Act 19 of 2003]

(2B)After having considered all information and documents furnished to the Registrar for the purposes of an application in terms of subsection (2), the Registrar may grant the application, either unconditionally or subject to such conditions as he or she may determine, if the Registrar is satisfied that—

(a)the foreign institution making that application lawfully conducts a business similar to the business of a bank in a country other than the Republic;

(b)the competent authority responsible in that other country for the supervision of that foreign institution—

(i)has duly authorized the proposed establishment of a representative office in the Republic by that foreign institution;

(ii)accepts, is committed to and complies with the proposals, guidelines and pronouncements of the Basle Committee on Banking Supervision;

(iii)is not legally precluded from fulfilling its obligations in terms of subparagraph (ii); and

(iv)will on a continuous basis furnish the Registrar with all material information regarding the financial soundness of that foreign institution; and

(c)the establishment of a representative office in the Republic by that foreign institution will not be detrimental to the public interest.

[subsection (2B) inserted by section 2(b) of Act 55 of 1996 and amended by section 24(b) of Act 19 of 2003]

(2C)Upon granting an application for consent to the establishment of a representative office in the Republic, the Registrar, against payment of the prescribed fee by the foreign institution, shall issue to the foreign institution, on the prescribed form, a certificate of authorization for the establishment of a representative office in the Republic.[subsection (2C) inserted by section 2(b) of Act 55 of 1996]

(3)After the establishment of a representative office in terms of this section the foreign institution concerned shall in writing notify the Registrar—

(a)of any change of the name of the institution;

(b)of any substitution of its chief representative officer in the Republic;

(c)of any change of the address of the representative office; or

(d)of the closing of the representative office,

as soon as it occurs.

(4)A representative office contemplated in this section may not conduct the business of a bank in the Republic.

(5)Representative offices established in accordance with the provisions of this section shall furnish the Registrar, at such time or times or at such intervals or in respect of such period or periods and in such form as may be prescribed, with such prescribed information as the Registrar may require reasonably for purposes of the performance of his or her functions under this Act.[subsection (5) added by section 2(c) of Act 55 of 1996 and substituted by section 24(c) of Act 19 of 2003]

(6)Representative offices established in accordance with this section shall conduct their business subject to such conditions as may be prescribed.[subsection (6) added by section 24(d) of Act 19 of 2003]

35. Annual licence

A bank, a branch by means of which a foreign institution is under section 18A authorized to conduct the business of a bank in the Republic and a representative office established in terms of section 34 shall obtain from the Registrar a business licence pertaining to its particular business in respect of each year ending on the thirty-first day of December against payment of the prescribed licence fees.[section 35 substituted by section 28 of Act 26 of 1994]

Chapter IV
Shareholding in, and registration of controlling companies in respect of, banks

36. ***

[section 36 amended by section 3(a) and (b) of Act 42 of 1992 and repealed by section 29 of Act 26 of 1994]

37. Permission for acquisition of shares in bank or controlling company

(1)Subject to the provisions of subsection (6), no person shall acquire in a bank or controlling company shares—

(a)of which the total nominal value; or

(b)of which the total nominal value together with the total nominal value or such shares already held by such person; or

(c)of which the total nominal value together with the total nominal value of such shares already held by such person and by the associate or associates of such person,[paragraph (c) substituted by section 25(a) of Act 19 of 2003]

amounts to more than 15 per cent of the total nominal value of all the issued shares of the bank or controlling company, without first having obtained permission in accordance with the provisions of subsection (2) for such acquisition.[subsection (1) amended by section 4(a) of Act 42 of 1992]

(2)

(a)If, subject to the provisions of paragraph (c)—

(i)any person has for a period of 12 months or such shorter period as the Registrar may deem fit held so many shares in a bank or controlling company as such person may in accordance with the provisions of subsection (1) hold therein, such person may, if the Registrar has granted permission in writing thereto, acquire more than 15 percent, but not exceeding 24 percent, of those shares as contemplated in the said subsection;

(ii)the said person has for a period of 12 months or such shorter period as the Registrar may deem fit held 24 percent of those shares as so contemplated such person may, if the Registrar has granted permission in writing thereto, acquire more than 24 percent, but not exceeding 49 percent, of those shares as contemplated in the said subsection (1);

(iii)the said person has for a period of 12 months or such shorter period as the Minister may deem fit held 49 percent of those shares as contemplated in the said subsection (1) such person may, if the Minister has, through the Registrar, granted permission thereto in writing, acquire more than 49 percent, but not exceeding 74 percent, of those shares as contemplated in the said subsection; and

(iv)the said person has for a period of 12 months or such shorter period as the Minister may deem fit held 74 percent of those shares as contemplated in the said subsection (1) such person may, if the Minister has, through the Registrar, granted permission thereto in writing, acquire more than 74 percent of those shares as contemplated in the said subsection.

(b)In considering granting permission in terms of paragraph (a) the Registrar or the Minister, as the case may be, may consult with the Competition Commission established in terms of the Competition Act, 1998 (Act No. 89 of 1998).

(c)Notwithstanding the provisions of paragraph (a), the Registrar or the Minister, as the case may be, may, if in a particular case the Registrar or the Minister, as the case may be, deems it fit to do so, grant permission for the acquisition of shares as contemplated in subparagraph (i), (ii), (iii) or (iv) of paragraph (a) without the applicant for such permission having held shares for the period of 12 months or any shorter period as required in any of the said subparagraphs.

[subsection (2) substituted by section 25(b) of Act 19 of 2003]

(3)If any person at the commencement of the Deposit-taking Institutions Amendment Act, 1992, already holds more than 15 per cent of the shares in a bank or controlling company as contemplated in subsection (1), such person may not acquire more of those shares as contemplated in the said subsection before such person has obtained the appropriate permission in terms of subsection (2).[subsection (3) substituted by section 4(d) of Act 42 of 1992 and by section 25(c) of Act 19 of 2003]

(4)Permission in terms of subsection (2) for the acquisition of shares in a bank or controlling company shall not be granted unless the Registrar or the Minister, as the case may be, is satisfied that the proposed acquisition of shares—

(a)will not be contrary to the public interest; and

(b)will not be contrary to the interests of the bank concerned or its depositors or of the controlling company concerned, as the case may be.

(5)If, in the case of a shareholding contemplated in—

(a)subsection 2(a)(i) and (ii), the Registrar; or

(b)subsection (2)(a)(iii) and (iv), the Minister,

is of the opinion that the retention of such shareholding in a bank or controlling company by a particular shareholder will be to the detriment of the bank or controlling company concerned, the Registrar or the Minister, as the case may be, may by way of application on notice of motion apply to the division of the High Court in whose area of jurisdiction the head office of the bank or controlling company is situated, for an order—

(i)competling such shareholder to reduce, within a period determined by the court, the shareholding of that person in that bank or controlling company to a shareholding, as contemplated in subsection (1), with a total nominal value of not more than 15 per cent of the total nominal vatue of all the issued shares of that bank or controlling company; and

(ii)limiting, with immediate effect, the voting rights that may be exercised by such shareholder by virtue of the shareholding of that person to 15 per cent of the voting rights attached to all the issued shares of the bank or controlling company concerned.

[subsection (5) substituted by section 4(e) of Act 42 of 1992 and by section 25(d) of Act 19 of 2003]

(6)The provisions of subsection (1) shall not apply to the acquisition of shares in a bank by a controlling company registered as such in respect of that bank.[subsection (6) substituted by section 4(f) of Act 42 of 1992]

(7)For the purposes of this section "associate"—

(a)in relation to a natural person, means—

(i)a close relative of that person; or

(ii)any person who has entered into an agreement or arrangement with the first-mentioned person, relating to the acquisition, holding or disposal of, or the exercising of voting rights in respect of, shares in the bank or contrelling company in question;

(b)in relation to a juristic person—

(i)which is a company, means any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary;

(ii)which is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), means any member thereof as defined in section 1 of that Act;

(iii)which is not a company or a close corporation as contemplated in this paragraph, means another juristic person which would have been a subsidiary of the first-mentioned juristic person—

(aa)had such first-mentioned juristic person been a company; or

(bb)in the case where that other juristic person, too, is not a company, had both the first-mentioned juristic person and that other juristic person been a company;

(iv)means any person in accordance with whose directions or instructions the board of directors of or, in the case where such juristic person is not a company, the governing body of such juristic person is accustomed to act; and

(c)in relation to any person—

(i)means any juristic person of which the board of directors or in the case where such juristic person is not a company of which the governing body is accustomed to act in accordance with the directions or instructions of the person first-mentioned in this paragraph; and

(ii)includes any trust controlled or administered by that person.

[subsection (7) substituted by section 30 of Act 26 of 1994]

38. Registration of shares in name of nominees

(1)Notwithstanding the provisions of the Companies Act, no bank or controlling company shall without the written approval of the Registrar—

(a)allot or issue any of its shares to, or register any of its shares in the name of, any person other than the intended beneficial shareholder;

(b)transfer any of its shares in the name of a person other than the beneficial shareholder; or

(c)after the commencement of this Act allow any of its shares to remain registered in the name of a person other than the beneficial shareholder.

(2)Subsection (1) shall not affect the allotment or issue, or the registration of the transfer, of shares in a bank or controlling company—

(a)in the name of a trustee of a unit trust scheme as defined in section 1 of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981), or of a nominated company of the trustee approved by the Registrar of Unit Trust Companies;

(b)in the name of any executor, administrator, trustee, curator, guardian or liquidator in the circumstances mentioned in section 103(3) of the Companies Act;

(c)for a period of not more than six months, in the name of a stock-broker or of a company established by such stock-broker for a purpose mentioned in section 12(3) of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), or of a company controlled by the bank or of an employee of the bank, if it is necessary that the shares be so allotted, issued or registered in order to facilitate delivery to the purchaser or to protect the rights of the beneficiary in respect of those shares or where the beneficiary is not known;[paragraph (c) amended by section 17(a) of Act 85 of 1992 and substituted by section 26 of Act 19 of 2003]

(d)in the name of a person in other special circumstances determined by the Minister by notice in the Gazette; or[paragraph (d) amended by section 17(b) of Act 85 of 1992]

(e)in the name of a central securities depository as defined in section 1 of the Safe Deposit of Securities Act, 1992.[paragraph (e) added by section 17(c) of Act 85 of 1992]

39. Furnishing of information by shareholders

Any person desiring shares in a bank or controlling company to be allotted or issued to such person or to be registered in the name of such person, or in whose name such shares are registered, and any person acting on behalf of such a person, shall at the written request of the bank or controlling company furnish it with—

(a)[paragraph (a) deleted by section 31 of Act 26 of 1994]

(b)such information as may be required by the bank or controlling company for the purposes of complying with the provisions of section 38.

[section 39 amended by section 27 of Act 19 of 2003]

40. Absence of wrongful intent

If a bank or a controlling company or any director, officer, employee or agent of a bank or controlling company in good faith and on the strength of information reasonably obtained acts or fails to act and thereby unknowingly contravenes the provisions of section 38, such act or failure to act shall not constitute an offence.[section 40 substituted by section 32 of Act 26 of 1994]

41. Effects of registration of shares contrary to Act

(1)No person shall—

(a)either personally or by proxy granted to any other person, cast a vote attached to; or

(b)receive a dividend payable on,

any share in a bank or controlling company allotted or issued to such person or registered in the name of such person in contravention of a provision of this Act.[subsection (1) substituted by section 28 of Act 19 of 2003]

(2)The validity of any resolution adopted by a bank or controlling company shall not be affected by a vote being cast in contravention of subsection (1)(a), if that resolution was adopted by the requisite majority of votes which were validly cast.

(3)A dividend referred to in subsection (1)(b) shall accrue to the bank or controlling company concerned.

42. Restriction of right to control bank

(1)Subject to the provisions of section 37, no person other than a bank or an institution which has been approved by the Registrar and which conducts business similar to the business of a bank in a country other than the Republic may exercise control over a bank, unless such person is a public company and is registered as a controlling company in respect of such bank.[subsection (1) substituted by section 5(1) of Act 42 of 1992 and by section 33(a) of Act 26 of 1994]

(2)For the purpose of this Act a person shall be deemed to exercise control over a bank if, in the case where that person is a company, the bank is a subsidiary of that company, or, whether or not that person is a company, if that person alone or together with his or her associates—

(a)holds shares in the bank of which the total nominal value represents more than 50 percent of the nominal value of all the issued shares of the bank, unless, due to limitations on the voting rights attached to the shares so held by the person alone or together with his or her associates, as the case may be, such person voting independently or such person and his or her associates voting as a group, is or are unable to decisively influence the outcome of the voting at a general meeting of the bank;

(b)is entitled to exercise more than 50 percent of the voting rights in respect of the issued shares of that bank; or

(c)is entitled or has the power to determine the appointment of the majority of the directors of that bank, including—

(i)the power to appoint or remove, without the concurrence of any other person, all or the majority of such directors; or

(ii)the power to prevent any person from being appointed a director without his or her consent,

and if a person’s appointment as a director of the bank follows necessarily from his or her appointment as a director of the person first-mentioned in this subsection, the first-mentioned appointment shall for the purposes of this subsection be deemed to be an appointment by virtue of a power of a person so first-mentioned.[subsection (2) substituted by section 29 of Act 19 of 2003]

(3)For the purposes of this section "associate" means an associate as defined in section 37(7).[subsection (3) substituted by section 33(b) of Act 26 of 1994]

43. Application for registration as controlling company

(1)A public company—

(a)which desires to exercise control over any bank; or

(b)which is a controlling company, as defined in section 1 of the Companies Act, in respect of any other public company which has applied in terms of section 16 for registration as a bank,

may apply to the Registrar on the form prescribed in the Regulations relating to Banks for registration as a controlling company in respect of that bank or proposed bank, as the case may be.[subsection (1) substituted by section 30 of Act 19 of 2003]

(2)An application referred to in subsection (1) shall be accompanied by such information and documents as may be prescribed.

(3)A public company applying in terms of subsection (1) for registration as a controlling company shall submit such additional particulars in connection with its application as the Registrar may require.

44. Granting or refusal of application for registration as controlling company

(1)Subject to the provisions of subsection (2), the Registrar may, after considering all information, documents and particulars furnished in terms of section 43 for the purposes of an application under that section, grant or refuse the relevant application or grant the application subject to such conditions as he or she may impose.[subsection (1) substituted by section 31(a) of Act 19 of 2003]

(2)The Registrar shall not grant an application made under section 43 unless he or she is satisfied—

(a)that the registration of the applicant as a controlling company will not be contrary to the public interest;

(b)that, in the case of an applicant applying for registration in the circumstances referred to in section 43 (1) (a), the applicant will be able to establish control, as contemplated in section 42 (2), over the bank concerned;

(c)that no provision of the memorandum of association or articles of association of the applicant is inconsistent with a provision of this Act or is undesirable in so far as it concerns banks;

(d)that every director or executive officer of the applicant is, as far as can reasonably be ascertained, a fit and proper person to hold the office of such director or executive officer, and that every such executive officer has sufficient knowledge and experience to manage the affairs of the applicant in its capacity of a controlling company;

(e)that the applicant is in a financially sound condition;

(f)that no interest which any person has in the applicant is inconsistent with a provision of this Act; and

(g)that the application complies with the requirements of this Act.

[subsection (2) amended by section 31(b) of Act 19 of 2003]

(3)When the Registrar in terms of this section grants or refuses an application for registration as a controlling company, he or she shall give written notice of that fact to the applicant concerned.[subsection (3) substituted by section 31(c) of Act 19 of 2003]

(4)

(a)If the Registrar in terms of this section grants an application he or she shall, upon compliance by the applicant with the conditions subject to which the application was granted and on payment of the prescribed registration fee, register the applicant concerned as a controlling company in respect of the bank concerned and on the prescribed form issue to the applicant a certificate of registration as a controlling company in respect of the bank concerned.[paragraph (a) substituted by section 31(d) of Act 19 of 2003]

(b)No applicant which has applied for registration as a controlling company in the circumstances referred to in section 43 (1) (b) shall be registered as such a controlling company unless the company in respect of which it made such application is registered as a bank.

(5)In addition to any other condition which the Registrar may impose under subsection (1), he or she may impose a condition requiring an applicant which applied for registration as a controlling company in the circumstances referred to in section 43(1)(a)—

(a)to furnish within a specified period proof to the satisfaction of the Registrar that it will immediately after its registration as a controlling company establish control over the bank in respect of which it desires to be registered; or

(b)to make an offer, within a specified period and on a basis and on conditions regarded by the Registrar as reasonable and fair, to persons holding shares in the said bank to lake up shares in the applicant or to exchange shares held by them in the said bank for shares in the applicant.

[subsection (5) amended by section 31(e) of Act 19 of 2003]

(6)

(a)Whenever the Registrar has imposed a condition referred to in subsection (5)(b), he or she may, after consultation with the applicant concerned, designate a person to investigate, independently of the applicant, and to advise the Registrar on, the reasonableness and fairness of the basis and conditions on which the applicant intends to make the share offer in compliance with the condition.[paragraph (a) substituted by section 31(f) of Act 19 of 2003]

(b)The costs of an investigation in terms of paragraph (a) shall be paid by the applicant concerned.

(7)A public company which on the date immediately preceding the date of commencement of the Deposit-taking Institutions Amendment Act, 1993 (hereinafter in this subsection referred to as the Amendment Act), is, in terms of the provisions of this Act as those provisions existed prior to the amendment thereof by the Amendment Act, registered as a controlling company in respect of a deposit-taking institution, shall, with effect from the date of the reregistration of the deposit-taking institution concerned as a bank in terms of section 33, be deemed to be a controlling company registered as such in terms of this section in respect of the bank as so reregistered.[subsection (7) substituted by section 10 of Act 9 of 1993]

45. Cancellation by Registrar of registration of controlling company

(1)If a controlling company has failed to establish control over the bank in respect of which it is registered, or no longer exercises such control, the Registrar may by notice in writing to such controlling company cancel its registration in respect of that bank.

(2)No cancellation of any registration under subsection (1) shall be of force unless the Registrar has previously by notice in writing given the controlling company concerned an opportunity to show cause within a period specified in the notice, not being less than 30 days, why its registration should not be cancelled.

46. Cancellation by court of registration of controlling company

(1)The Registrar may by way of application on notice of motion apply to a competent court for an order cancelling the registration of a controlling company if in the opinion of the Registrar there exist grounds, other than the grounds referred to in section 45, justifying such cancellation.

(2)The provisions of subsections (2) and (3) of section 25 shall mutatis mutandis apply to an application under subsection (1).

(3)In addition to any other grounds which the court may consider sufficient to justify the granting of an order under subsection (1) cancelling the registration of a controlling company, such an order may also be granted if the controlling company concerned—

(a)has furnished the Registrar in or in connection with its application for registration with information which is in a material respect untrue; or

(b)has contravened or failed to comply with a provision of or a requirement under this Act,

or if, on any other ground advanced by the Registrar in the relevant application, the court is of the opinion that it is not in the public interest to allow the controlling company concerned to continue its activities as a controlling company.

47. Cancellation of registration at request of controlling company

The Registrar shall cancel the registration of a controlling company upon submission to him or her by the controlling company of a special resolution contemplated in section 200 of the Companies Act authorizing such cancellation.[section 47 substituted by section 32 of Act 19 of 2003]

48. Lapse of registration of controlling company upon cancellation of registration of bank

(1)If the registration of a bank in respect of which a controlling company is registered, is cancelled, the registration of that controlling company in respect of that bank shall be deemed to have been cancelled simultaneously.[subsection (1) substituted by section 35 of Act 26 of 1994]

(2)The cancellation of the registration of a controlling company by virtue of the provisions of subsection (1) shall he with effect from the date on which the bank concerned in terms of section 31 ceased to be registered as such.

49. Date on which registration of controlling company lapses

A controlling company shall cease to be registered as such—

(a)in the case of a registration cancelled by the Registrar under section 45, upon expiry of 30 days after the date of the notice referred to in subsection (1) of that section or, if an application for the review of such a decision to cancel was lodged with the board of review in terms of section 9 before the expiry of the said 30 days and the board of review has confirmed such cancellation, upon the date on which the controlling company concerned is notified of such confirmation;[paragraph (a) substituted by section 7 of Act 36 of 2000]

(b)in the case of a registration in respect of which the court has granted an order under section 46 cancelling the registration, upon the date on which that order comes into force; or

(c)in the case of a registration cancelled by the Registrar in terms of section 47, upon such date as may be determined by the Registrar.

50. Investments by controlling companies

A controlling company investing money—

(a)in undertakings other than banks, institutions which conduct business similar to the business of a bank in a country other than the Republic, controlling companies or companies of which the main object is the holding or development of property which is used or intended to be used mainly for the purpose of conducting the business of a bank; or

(b)to fixed property which is not used or intended to be used mainly for the purpose of conducting the business of a bank,

shall manage its transactions in such investments in such a way that the amount of such investments does not at any time exceed 40 per cent of the sum of the share capital and reserve funds of the controlling company and any bank under its control, calculated on a consolidated basis in the manner prescribed.[section 50 substituted by section 33 of Act 19 of 2003]

Chapter V
Functioning of banks and controlling companies with reference to Companies Act

51. Application of Companies Act to banks and controlling companies

(1)A company registered as a bank or as a controlling company shall continue to be a company in terms of the Companies Act, and the provisions of that Act shall, subject to the provisions of subsection (2), continue to apply to any such company to the extent to which they are not inconsistent with any provision of this Act: Provided that—

(a)the provisions of the Companies Act governing the conversion of public companies into other forms of companies shall not apply to any such company; and

(b)in the application, by virtue of the provisions of this subsection, of the provisions of section 171 (1) of the Companies Act in respect of a company referred to in this subsection, the reference in the said section 171 (1)—

(i)to "director", shall be deemed to be a reference only to a director whose name appears in the relevant company’s register of directors and officers contemplated in section 215 of the Companies Act; and

(ii)to "business letter", shall be deemed not to include a reference to any printed form of advice.

(2)The Minister may with the concurrence of the Minister of Trade and Industry by notice in the Gazette declare that a provision of the Companies Act specified in such notice—

(a)shall not apply to any company registered as a bank or as a controlling company;

(b)shall only apply to any such company subject to such adjustments and qualifications as may be specified in the notice; or

(c)the administration of which vests in the Registrar of Companies, shall in respect of companies registered as banks or as controlling companies vest in the Registrar.

[subsection (2) amended by section 11 of Act 9 of 1993]

(3)[subsection (3) deleted by section 34 of Act 19 of 2003]

52. Subsidiaries, branch offices, other interests and representative offices of banks and controlling companies

(1)A bank shall not without the prior written approval of the Registrar or otherwise than in accordance with conditions approved by the Registrar in writing—

(a)establish a subsidiary or create a division in the manner prescribed within or outside the Republic or enter into an agreement having the effect that any company becomes its subsidiary or such division within or outside the Republic;[paragraph (a) substituted by section 35(a) of Act 19 of 2003]

(aA)invest in a joint venture within or outside the Republic if the investment, or the investment together with one or more investments already made by the bank in that joint venture, results in the bank being exposed to an amount representing more than five per cent of its capital and reserves: Provided that for as long as the bank is exposed to the aforementioned extent, such approval must be obtained whenever it seeks to make a further investment in that joint venture;[paragraph (aA) inserted by section 3(a)(i) of Act 55 of 1996]

(b)open a branch office outside the Republic;

(c)acquire an interest in any undertaking having its registered office or principal place of business outside the Republic;[paragraph (c) substituted by section 3(a)(ii) of Act 55 of 1996]

(d)outside the Republic—

(i)create a trust of which the bank is a major beneficiary; or

(ii)establish any financial or other business undertaking under its direct or indirect control; or

(e)establish a representative office outside the Republic.

(2)To obtain the prior approval of the Registrar as contemplated in subsection (1), there shall be lodged with the Registrar a written application in which full particulars of the proposed action are furnished, including, in the case of a proposed establishment of a representative office outside the Republic as contemplated in paragraph (e) of the said subsection—

(a)the country in which the representative office is to be established;

(b)the name of the proposed chief representative officer, in that country, of the bank; and

(c)the address of the proposed representative office in that country.

(3)The Registrar may require an applicant contemplated in subsection (2) to furnish him or her with such information, in addition to particulars furnished by the applicant in terms of that subsection, as the Registrar may deem necessary.[subsection (3) substituted by section 35(b) of Act 19 of 2003]

(4)After the establishment in terms of this section of a representative office outside the Republic, the bank concerned shall in writing notify the Registrar of—

(a)any substitution of its chief representative officer in the country concerned;

(b)any change of the address of the representative office in question; or

(c)the closing down of the represent alive office,

as soon as it occurs.

(5)The provisions of subsection (1) (a), (c) and (d), and of subsections (2) and (3) in so far as they are relevant, shall mutatis mutandis apply in respect of any controlling company.

(6)For the purposes of this section and section 53 “joint venture” means a contractual arrangement between two or more persons, one or more of whom is a bank or a controlling company, in terms whereof the parties undertake an economic activity that is subject to their joint control.[subsection (6) added by section 3(b) of Act 55 of 1996]

53. Disclosure by banks and controlling companies of interest in subsidiaries, trusts and other undertakings

A bank or a controlling company shall on such a form and at such intervals as may be prescribed furnish the Registrar with such particulars as may be prescribed relating to its shareholding or other interest in—

(a)its subsidiaries contemplated in section 52 (1) (a);

(aA)any joint venture contemplated in section 52(1)(aA);[paragraph (aA) inserted by section 4 of Act 55 of 1996]

(b)an undertaking contemplated in section 52 (1) (c); or

(c)any trust or financial or other business undertaking contemplated in section 52 (1) (d).

54. Compromises, amalgamations, arrangements and affected transactions

(1)No compromise, amalgamation or arrangement referred to in Chapter XII of the Companies Act and which involves a bank as one of the principal parties to the relevant transaction, and no arrangement for the transfer of all or any part of the assets and liabilities of a bank to another person, shall have legal force unless the consent of the Minister, conveyed in writing through the Registrar, to the transaction in question has been obtained beforehand.

(2)The Minister shall not grant his or her consent referred to in subsection (1) unless—

(a)he or she is satisfied that the transaction in question will not be detrimental to the public interest;[paragraph (a) substituted by section 36(a) of Act 19 of 2003]

(b)in the case of an amalgamation referred to in subsection (1), the amalgamation is an amalgamation of banks only; or

(c)in the case of a transfer of assets and liabilities referred to in subsection (1) which entails the transfer by the transferor bank of the whole or any part of its business as a bank, such transfer is effected to another bank or a person approved by the Registrar for the purpose of the said transfer.[paragraph (c) substituted by section 1 of Proclamation 132 of 1994 and by section 36(a) of Act 26 of 1994]

[subsection (2) amended by section 36(a) of Act 19 of 2003]

(3)Upon the coming into effect of a transaction effecting the amalgamation of one bank with another bank as contemplated in subsection (2)(b) or effecting the transfer of all or part of the assets and liabilities of one bank to another bank or person as contemplated in subsection (2)(c)—

(a)all the assets and liabilities of the amalgamating banks or, in the case of such transfer of assets and liabilities, those assets and liabilities of the transferor bank that are transferred in terms of the transaction, shall vest in and become binding upon the amalgamated bank or, as the case may be, the bank or person taking transfer of such assets and liabilities;

(b)the amalgamated bank or, in the case of such transfer of assets and liabilities, the bank or person taking transfer of such assets and liabilities, shall have the same rights and be subject to the same obligations as those which the amalgamating banks or, as the case may be, the transferor bank may have had or to which they or it may have been subject immediately before the amalgamation or transfer;

(c)all agreements, appointments, transactions and documents entered into, made, drawn up or executed with, by or in favour of any of the amalgamating banks or, as the case may be, the transferor bank, and in force immediately prior to the amalgamation or transfer, but excluding such agreements, appointments, transactions and documents that, by virtue of the terms and conditions of the amalgamation or transfer, are not to be retained in force, shall remain of full force and effect and shall be construed for all purposes as if they had been entered into, made, drawn up or executed with, by or in favour of the amalgamated bank or, as the case may be, the bank or person taking transfer of the assets and liabilities in question; and

(d)any bond, pledge, guarantee or instrument to secure future advances, facilities or services by any of the amalgamating banks or, as the case may be, by the transferor bank, which was in force immediately prior to the amalgamation or transfer, shall remain of full force and effect and shall be construed as a bond, pledge, guarantee or instrument given to or in favour of the amalgamated bank or, as the case may be, the bank or person taking transfer of such assets and liabilities, as security for future advances, facilities or services by that bank or person except where, in the case of such transfer, any obligation to provide such advances, facilities or services is not included in the transfer.

[subsection (3) amended by section 25(b) of Act 9 of 1993, substituted by section 36(b) of Act 26 of 1994, and by section 5(a) of Act 55 of 1996]

(4)Any compromise, amalgamation or arrangement, or any arrangement for the transfer of assets and liabilities, referred to in subsection (1), excluding a transfer other than a transfer referred to in subsection (2)(c), shall be subject—

(a)to confirmation at a general meeting of shareholders of each of the banks concerned; or

(b)in the case of a transaction effecting the transfer of assets and liabilities of one bank to another bank or a person as contemplated in subsection (2)(c), to confirmation at a general meeting of shareholders of the transferor bank and the bank or person taking transfer of such assets and liabilities,[paragraph (b) substituted by section 5(b) of Act 55 of 1996]

and the notice convening such a meeting shall contain or have attached to it the terms and conditions of the relevant agreement or arrangement.[subsection (4) substituted by section 36(b) of Act 26 of 1994]

(5)Notice of the passing of the resolution confirming, as contemplated in subsection (4), any compromise, amalgamation or arrangement, or any arrangement for the transfer of assets and liabilities, together with a copy of such resolution and the terms and conditions of the relevant agreement or arrangement, duly certified by the chairperson of the meeting at which such resolution was passed and by the secretary of the bank or person concerned, shall be sent to the Registrar by each of the banks involved or, in the case of a transaction effecting the transfer of assets and liabilities of one bank to another bank or a person as contemplated in subsection (2)(c), by the relevant transferor bank and the bank or person taking transfer of such assets and liabilities, and after having received such notices from all the parties to the relevant agreement or arrangement, the Registrar shall register those notices.[subsection (5) substituted by section 36(b) of Act 26 of 1994 and by section 5(c) of Act 55 of 1996]

(6)Upon the registration by the Registrar of the notices referred to in subsection (5)—

(a)of any amalgamation of two or more banks, the registration of the individual banks which were parties to the amalgamation shall be deemed to be cancelled and the Registrar shall withdraw those registrations and, on payment by the bank created by the amalgamation of the prescribed registration fee, register such bank, subject mutatis mutandis to the provisions of section 18, as a bank; or[paragraph (a) amended by section 25(b) of Act 9 of 1993 and substituted by section 36(c) of Act 26 of 1994]

(b)of any arrangement for the transfer of all the assets and liabilities of a bank, the registration of such bank shall be deemed to be cancelled and shall be withdrawn by the Registrar.

(7)Upon registration of a bank by the Registrar in terms of subsection (6), he or she shall issue a certificate of registration to the bank concerned.[subsection (7) amended by section 25(b) of Act 9 of 1993, by section 36(d) of Act 26 of 1994 and substituted by section 36(b) of Act 19 of 2003]

(8)The Registrar of Companies, every Master of the High Court and every officer or person in charge of a deeds registry or any other office, if, in the office of such Registrar, Master, officer or person or any register under the control of such Registrar, Master, officer or person there—

(a)is registered any title to property belonging to, or any bond or other right in favour of, or any appointment of or by;

(aA)is registered any share, stock, debenture or other marketable security in favour of; or

(b)has been issued any licence to or in favour of,

any bank which has amalgamated with any other bank or any bank which has transferred all or part of its assets and liabilities to any other bank or person, shall, if satisfied—

(i)that the Minister has consented in terms of subsection (1) to the amalgamation or transfer; and

(ii)that such amalgamation or transfer has been duly effected, and upon production to such Registrar, Master, officer or person of any relevant deed, bond, share, stock, debenture, certificate, letter of appointment, licence or other document, make such endorsements thereon and effect such alterations in the registers of such Registrar, Master, officer or person as may be necessary to record the transfer of the relevant property, bond or other right, share, stock, debenture, marketable security, letter of appointment or licence and of any rights thereunder to the amalgamated bank or, as the case may be, to the bank or person that has taken transfer of the said assets and liabilities.

[subsection (8) amended by section 12(a) of Act 9 of 1993, substituted by section 36(e) of Act 26 of 1994, by section 5(d) of Act 55 of 1996 and by section 36(c) of Act 19 of 2003]

(8A)No transfer duty, stamp duty, registration fees, licence duty or other charges shall be payable in respect of—

(a)a transfer contemplated in subsection (8) taking place in the execution of a transaction entered into at the instance of the Registrar in the interest of the effective supervision of banks or the maintenance of a stable banking sector; or

(b)any endorsement or alteration made to record such transfer,

upon submission to the Registrar of Companies, or the Master, officer or person referred to in subsection (8), as the case may be, of a written confirmation by the Registrar of Banks that the Minister, on the recommendation of the last-mentioned Registrar and after consultation with the Commissioner for Inland Revenue, has consented to the waiver of such duties, fees or charges.[subsection (8A) inserted by section 5(e) of Act 55 of 1996]

(9)The provisions of this section shall not affect the rights of any creditor of a bank which has amalgamated with or transferred all its assets and liabilities to any other bank or person or taken over all the assets and liabilities of any other bank, except to the extent provided in this section.[subsection (9) substituted by section 12(b) of Act 9 of 1993 and by section 36(e) of Act 26 of 1994]

(10)The conditions and any tax benefit which immediately prior to the date of a transfer, referred to in this section, of assets and liabilities were applicable in respect of an investment, referred to in section 10(1)(i)(xii), (xiiA) or (xiii), 10(1)(w), or 19 (5A) of the Income Tax Act, 1962 (Act No. 58 of 1962), with the transferor bank shall, notwithstanding such a transfer of assets and liabilities but subject to the provisions of the said Act, remain applicable to the investment until the expiration of a period of ten years as from the date on which it was initially made or until it is redeemed, whichever occurs first.[subsection (10) substituted by section 12(c) of Act 9 of 1993]

(11)Notwithstanding anything to the contrary contained in—

(a)Chapter XVA of the Companies Act;

(b)the Securities Regulation Code on Take-overs and Mergers published by Government Notice No. R.29 dated 18 January 1991, and any amendment thereof; or

(c)the Rules under section 440C(4)(a), (b), (c) and (f) of the Companies Act, published by the said Government Notice No. R.29, and any amendment thereof,

neither the Securities Regulation Panel established by section 440B of the Companies Act nor its executive committee or its executive director shall furnish any clearance, decision or ruling in respect of a matter submitted to it or such executive director in terms of the provisions of the above-mentioned Code or Rules, and which matter relates to an affected transaction, as defined in section 440A(1) of the Companies Act involving—

(i)[paragraph (i) deleted by section 36(f) of Act 26 of 1994]

(ii)an acquisition of shares in a bank or controlling company for which permission under section 37(2)(a)(i), (ii), (iii) or (iv) is a prerequisite,

unless the person submitting the matter in question has furnished the said Panel, executive committee or executive director with written proof that such exemption or permission, as the case may be, has in fact been obtained.[subsection 11 amended by section 36(d) of Act 19 of 2003]

[section 54 substituted by section 6 of Act 42 of 1992]

55. Reconstruction within group of companies

No reconstruction of companies within a group—

(a)in respect of which annual financial statements are required to be made out in terms of section 283 (1) of the Companies Act; and

(b)of which a bank or a controlling company or subsidiary of a bank is a member,

shall be effected without the prior written approval of the Registrar.

56. Alteration of memorandum or association or articles of association, and change of name

(1)No—

(a)alteration, in terms of section 55, 56 or 62 of the Companies Act, of the memorandum of association or articles of association of a company registered as a bank; or

(b)change, in terms of section 44 of the Companies Act, of the name of any such company,

shall have legal force for the purposes of this Act or any other law unless such alteration or change has been approved in writing by the Registrar prior to the registration thereof by the Registrar of Companies.

(2)Any application for the Registrar’s approval in terms of subsection (1) shall be lodged with the Registrar before the proposed special resolution authorizing the alteration or change in question is laid before a general meeting of the company, and such application shall be accompanied by—

(a)two copies of the proposed special resolution; and

(b)an explanation of the reasons for the resolution.

(3)The Registrar shall not grant any application referred to in subsection (2) if he or she is of the opinion—

(a)that the proposed alteration is inconsistent with any provision of this Act or is undesirable in so far as it concerns the activities of banks; or

(b)that the proposed new name is unacceptable on any of the grounds mentioned in subparagraphs (i), (ii), (iii) and (iv) of section 17 (2) (e).

[subsection (3) amended by section 37(a) of Act 19 of 2003]

(4)A bank shall within 21 days of the registration by the Registrar of Companies of an alteration of its memorandum of association or articles of association or a change of its name, furnish the Registrar with a certified copy of the special resolution which sets out the alteration or change of name, as the ease may be.

(5)Upon receipt, by virtue of the provisions of subsection (4), of a copy of a special resolution, and payment by the bank concerned of the prescribed fee, the Registrar shall—

(a)in the case of a special resolution relating to an alteration of a memorandum of association or articles of association, register the alteration in question and issue to the bank concerned a certificate to the effect that the said alteration has been registered by the Registrar with effect from a date specified in the certificate; or

(b)in the case of a special resolution relating to a change of name, change the name of the bank concerned in the register of banks, and issue to the bank concerned a certificate of such change of name.[paragraph (b) amended by section 25(b) of Act 9 of 1993 and substituted by section 37(b) of Act 19 of 2003]

(6)An alteration referred to in subsection (5) (a) shall not take effect until it has been registered in terms of that subsection.

(7)The provisions of subsections (1), (2) and (3) shall not apply with respect to any alteration of a bank's memorandum of association or articles of association to accordance with a direct ion by the Registrar under this Act.

(8)The provisions of subsection (1) (a), and of subsections (2),(3), (4), (5) and (6) bi so far as they are relevant, shall mutatis mutandis apply in respect of any controlling company.

57. Alteration of memorandum of association or articles of association in accordance with direction of Registrar

(1)The Registrar may at any time in writing direct a bank to effect such alteration, not contrary to a provision of this Act, to its memorandum of association or articles of association as the Registrar may deem desirable in order to remove anomalies or undesirable divergences in the activities of different banks.

(2)An alteration directed by the Registrar under subsection (1) shall on or before the day of the first annual general meeting, referred to in section 175 of the Companies Act, following upon the date of such direction, be submitted for consideration to the shareholders of the bank concerned.

(3)If a bank refuses or fails to alter its memorandum of association or articles of association in accordance with a direction of the Registrar under subsection (1), the Registrar may submit a copy of that direction to the Registrar of Companies, who shall thereupon deal with the proposed alteration contained therein in accordance with the Companies Act as if it were contained in a special resolution adopted by the bank concerned and submitted to the Registrar of Companies by that bank in accordance with that Act.[subsection (3) amended by section 25(b) of Act 9 of 1993 and substituted by section 38 of Act 19 of 2003]

58. Information regarding directors and officers

Every bank and every controlling company shall within 30 days of its registration as such, furnish the Registrar with a copy of its register of directors and officers referred to in section 215 of the Companies Act.[section 58 substituted by section 37 of Act 26 of 1994]

59. Returns regarding shareholders

(1)Every bank and every controlling company shall within 90 days of its registration as such, and annually thereafter within 30 days of the thirty-first day of December of each year, furnish the Registrar with a return regarding its shareholders as at the date of the said registration or as on the said thirty-first day of December, as the case may be.[subsection (1) substituted by section 38(a) of Act 26 of 1994]

(2)A return referred to in subsection (1) shall comprise separate lists of domestic and foreign shareholders, each of which shall be compiled in alphabetical order according to the names of the shareholders and stating opposite each name—

(a)the address of the shareholder;

(b)the number and class of shares registered in the name of the shareholder;[paragraph (b) substituted by section 39(a) of Act 19 of 2003]

(c)the total nominal value of those shares;

(d)the percentage which the total nominal value of those shares represents of the total nominal value of all the issued shares of the bank or controlling company; and

(e)if the shareholder is a bank, controlling company or, in the case of a foreign shareholder, an institution conducting business similar to the business of a bank, the fact that it is such a bank, controlling company or institution, as the case may be:

Provided—

(i)that two or more domestic shareholders who are associates shall in alphabetical order according to their names be included in the list as a group under the name of one of the associates, stating, in addition to the particulars referred to in paragraphs (a) to (f), inclusive—

(aa)the fact that they are associates;

(bb)the total nominal value of all the shares registered in their respective names; and

(cc)the percentage which the total nominal value of those shares represents of the total nominal value of all the issued shares of the bank or controlling company; and

(ii)that the name of a shareholder and the particulars referred to in paragraphs (a) to (e), inclusive, shall, subject to subsection (3), not be included in such a list if the total nominal value of the shares registered in the name of the shareholder—

(aa)in the case of a domestic shareholder, is less than one per cent of the total nominal value of all the issued shares of the bank or controlling company; or

(bb)the case of a foreign shareholder, is less than the lower of R100 000 or one per cent of the total nominal value of all such issued shares.

[subparagraph (ii) amended by section 39(b) of Act 19 of 2003]

(3)A return referred to in subsection (1) shall further specify—

(a)the number of domestic and the number of foreign shareholders whose names and individual particulars are by virtue of paragraph (ii) of the proviso to subsection (2) not included in the lists, and opposite the respective numbers—

(i)the number of shares registered in the name of the relevant share holders;

(ii)the total nominal value of such shares; and

(iii)the percentage which the total nominal value of such shares represents of the total nominal value of all the issued shares of the bank or controlling company; and

(b)the total nominal value of shares registered in the name of all domestic and all foreign shareholders, respectively.

(4)If the total nominal value of the shares in a bank or controlling company registered in the name of a shareholder is less than the lower of R100 000 or one per cent of the total nominal value of all the issued shares of the bank or controlling company concerned, such bank or controlling company may, for the purposes of this section, summarily accept, unless it has knowledge to the contrary, that the shareholder concerned—

(a)is a domestic shareholder, if the address entered in respect of such shareholder in the register of members referred to in section 105 of the Companies Act is an address in the Republic; and

(b)is not an associate of any other shareholder of the bank or controlling company.

[subsection (4) substituted by section 13 of Act 9 of 1993]

(5)For the purposes of this section "associate" means an associate as defined in section 37(7).[subsection (5) substituted by section 38(b) of Act 26 of 1994]

60. Directors of bank or controlling company

(1)Each director, chief executive officer and executive officer of a bank owes a fiduciary duty and a duty of care and skill to the bank of which such a person is a director, chief executive officer or executive officer.[subsection (1) substituted by section 40(a) of Act 19 of 2003]

(1A)Each director, chief executive officer and executive officer of a bank owes a duty towards the bank to—

(a)act bona fide for the benefit of the bank;

(b)avoid any conflict between the bank’s interests and the interests of such a director, chief executive officer or executive officer, as the case may be;

(c)possess and maintain the knowledge and skill that may reasonably be expected of a person holding a similar appointment and carrying out similar functions as are carried out by the director, chief executive officer or executive officer of that bank; and

(d)exercise such care in the carrying out of his or her functions in relation to that bank as may reasonably be expected of a diligent person who holds the same appointment under similar circumstances, and who possesses both the knowledge and skill mentioned in paragraph (c) and any such additional knowledge and skill as the director, chief executive officer or executive officer in question may have.

[subsection (1A) inserted by section 40(b) of Act 19 of 2003]

(1B)

(a)The Registrar may institute action in terms of section 424 of the Companies Act against any director, chief executive officer or executive officer of a bank who was knowingly a party to the carrying on of the business of the bank in the manner envisaged in that section.

(b)Notwithstanding anything to the contrary in any law, any amount recovered as a result of proceedings instituted by the Registrar as envisaged in paragraph (a), shall be utilized—

(i)first to reimburse all expenses reasonably incurred by the Registrar in bringing such proceedings;

(ii)thereafter to set off against any amount paid to depositors by the Registrar, a deposit insurance scheme, or any governmental body, as part or full compensation for the losses suffered by depositors as a result of the bank being unable to repay their deposits; and

(iii)thereafter for the pro rata repayment of the losses of depositors.

[subsection (1B) inserted by section 40(b) of Act 19 of 2003]

(2)Without derogating from the provisions of subsections (1) and (1A), a director, chief executive officer or executive officer of a bank shall, in the performance of his or her functions in respect of that bank, observe such guidelines and comply with such requirements as may be prescribed under section 90(1)(b).[subsection (2) substituted by section 40(c) of Act 19 of 2003]

(3)Notwithstanding anything to the contrary in any law or the common law or in any agreement contained, not more than 49 per cent, rounded off to the next lower integral number, of the directors of—

(a)a bank shall be employees of that bank or of any of its subsidiaries, or of such bank’s controlling company, or of any of such controlling company’s subsidiaries;[paragraph (a) amended by section 25(b) of Act 9 of 1993 and substituted by section 39(a) of Act 26 of 1994]

(b)a controlling company shall be employees of that company or of any bank in respect of which that company is registered as a controlling company:

Provided that in respect of any matter put to the vote at a meeting of the board of directors of a bank or of a controlling company, as the case may be, such directors who are employees of that bank or that controlling company, as the case may be, shall together not have a vote in excess of 49 per cent of the total vote cast by all the directors present and voting at that meeting.

(4)No person who on the date of commencement of this Act is a director of a bank or controlling company shall on the expiration of his term of office be eligible for reappointment as such a director unless or until he qualifies for such appointment in terms of the provisions of subsection (3).

(5)

(a)

(i)Every bank shall give the Registrar written notice of the nomination of any person for appointment as a non-executive member of its board of directors by furnishing the Registrar with the prescribed information in respect of the nominee.

(ii)The notice shall reach the Registrar at least 30 days prior to the proposed date of appointment.

(iii)The Registrar may object to the proposed appointment by means of a written notice, stating the grounds for the objection, given to the chairperson of the board of directors of the bank and to the nominee, within 20 days of receipt of the notice referred to in subparagraph (ii).

(iv)If the Registrar objects to the proposed appointment as envisaged in subparagraph (iii), the bank shall not appoint the nominee and any purported appointment shall have no legal effect: Provided that the bank or nominee may dispute the Registrar’s objection, in which case the provisions of subsection (6)(d) to (k), inclusive, shall apply mutatis mutandis.

(b)

(i)Every bank shall give the Registrar written notice of the appointment of a chief executive officer, executive director or executive officer by furnishing the Registrar with the prescribed information in respect of the appointee.

(ii)The Registrar may object to the appointment by means of a written notice, stating the grounds for the objection, given to the chief executive officer, or acting chief executive officer of the bank, and to the appointee, within 20 working days of receipt of the notice referred to in subparagraph (1).

(iii)If the Registrar objects to the appointment in terms of subparagraph (ii), the appointment shall be terminated within 14 working days of receipt of the Registrar’s notice of objection by the bank: Provided that the bank or appointee may dispute the Registrar’s objection, in which case the provisions of subsection (6)(d) to (k), inclusive, shall apply mutatis mutandis.

(iv)Notwithstanding anything to the contrary in any law or in any agreement, the appointment by a bank of a chief executive officer, executive director or executive officer shall be subject to the resolutive condition that the appointment is not terminated under subparagraph (iii).

(c)For the purpose of this subsection ‘every bank’ means the chief executive officer, or in the case where it concerns the appointment of the chief executive officer, such member of the board of directors as may be designated by the board of directors.[paragraph (c) added by section 40(e) of Act 19 of 2003]

[subsection (5) substituted by section 39(b) of Act 26 of 1994 and by section 40(d) of Act 19 of 2003]

(6)

(a)Without derogating from any law, the appointment of a chief executive officer, executive director or executive officer of a bank may be terminated by the Registrar if the chief executive officer, executive director or executive officer concerned is not, or is no longer, a fit and proper person to hold that appointment, or if it is not in the public interest that such chief executive officer, executive director or executive officer continues to hold such appointment.

(b)If the Registrar wishes to terminate the appointment of a chief executive officer, executive director or executive officer of a bank, as envisaged in paragraph (a), the Registrar shall notify the following parties in writing of his or her intention and of the grounds for the proposed termination:

(i)The chief executive officer, executive director or executive officer concerned;

(ii)The chairperson of the board of directors of that bank (except if the chairperson of the board is the person whose appointment the Registrar wishes to terminate, in which case each director of the bank concerned shall be notified); and

(iii)The chief executive officer of that bank, (except if the chief executive officer is the person whose appointment the Registrar wishes to terminate, in which case the deputy chief executive officer shall be notified).

(c)The written notice referred to in paragraph (b) shall notify such parties that they are entitled to submit written representations to the Registrar in response to that notice.

(d)Any affected party who wishes to respond to the Registrar’s written notice shall submit written representations in response to that notice to the Registrar within 14 working days of receipt of the Registrar’s notice, or within such longer period as the Registrar may, upon written application by the affected party concerned, allow.

(e)The Registrar shall, within 14 working days of receipt of a written representation referred to in paragraph (d)—

(i)consider the representation;

(ii)decide whether or not the appointment of the chief executive officer, executive director or executive officer concerned should be terminated for the reasons contemplated in paragraph (a); and

(iii)give notice to the affected parties referred to in paragraph (b) of his or her decision in writing.

(f)If, after having considered any written representation in respect of the chief executive officer, executive director or executive officer concerned, the Registrar remains of the view that such officer’s appointment should be terminated, or if no written representation is submitted to the Registrar within the period allowed under paragraph (d), the Registrar shall refer the matter to the Arbitration Foundation of South Africa or its successor-in-law, or any other body designated by the Registrar by means of a notice in the Gazette (hereinafter referred to as the "Arbitrator") for arbitration in terms of expedited procedures, approved by the Registrar in writing and published in the Gazette.

(g)The Registrar shall make the request for arbitration referred to in paragraph (f)—

(i)in writing; and

(ii)within three working days after the expiry of the 14 day period referred to in paragraph (e) or, if the affected parties do not submit any written representations to the Registrar within the period allowed under paragraph (d), within three working days after the expiry of that period.

(h)The Arbitrator shall determine whether or not adequate reasons exist for the termination, by the Registrar, of the appointment of the chief executive officer, executive director or executive officer concerned.

(i)If under paragraph (h) the Arbitrator decides that adequate reasons exist for the termination, the Arbitrator shall confirm the termination of the appointment in writing addressed to the Registrar and the chief executive officer, executive director or executive officer concerned, whereupon the termination shall immediately take effect.

(j)If the Arbitrator determines that adequate reasons do not exist for the termination, the Arbitrator shall reject the termination by written notice to the Registrar and to the chief executive officer, executive director or executive officer concerned, whereupon the appointment of the person in question shall continue with full force and effect.

(k)A termination in terms of this section shall not be subject to review in terms of section 9.

[subsection (6) substituted by section 40(f) of Act 19 of 2003]

(7)This section, where applicable, shall apply mutatis mutandis in respect of any branch or a controlling company.[subsection (7) added by section 40(f) of Act 19 of 2003]

[section 60 substituted by section 1 of Act 81 of 1991]

60A. Compliance function

(1)Notwithstanding anything to the contrary in any law, a bank shall establish an independent compliance function as part of the risk management framework of the bank.

(2)The compliance function shall be headed by a compliance officer of the bank, who shall perform his or her functions with such care and skill as can reasonably be expected from a person responsible for such a function in a similar institution.

(3)The appointed compliance officer shall perform his or her functions subject to such requirements and conditions as may be prescribed in the Regulations relating to Banks.

[section 60A inserted by section 41 of Act 19 of 2003]

60B. Corporate governance

(1)Notwithstanding anything to the contrary in any law, the board of directors and executive officers of a bank shall establish and maintain an adequate and effective process of corporate governance, which shall be consistent with the nature, complexity and risks inherent in the activities and the business of the bank concerned.

(2)The process of corporate governance shall be established with the objective of achieving the bank’s strategic and business objectives efficiently, effectively, ethically and equitably (within acceptable risk parameters), to ensure—

(a)compliance with the strategic framework and guidelines established for the bank or controlling company;

(b)commitment by the executive officers of the bank or controlling company to adhere to corporate behaviour that is universally recognised and accepted as correct and proper;

(c)a balance of interests of the shareholders and other interested persons who may be affected by the conduct of directors or executive officers of the bank or controlling company within a framework of effective accountability;

(d)that mechanisms and procedures are established and maintained to minimize or avoid potential conflicts of interests between the business interests of the bank or controlling company and the personal interests of directors or executive officers of the bank or controlling company;

(e)responsible conduct by the directors and executive officers of the bank or controlling company;

(f)the achievement of the maximum level of efficiency and profitability of the bank within an acceptable risk profile for the bank or controlling company;

(g)the timely, accurate and meaningful disclosure of matters that are material to the business of the bank or controlling company or the interests of the shareholders of or other persons having an interest in the bank or controlling company;

(h)that the board of directors retains control over the strategic and business direction of the bank or controlling company, whilst enabling its executives to manage the bank’s or controlling company’s operations and the achievement of the agreed strategic and business objectives; and

(i)compliance with all applicable laws and regulations.

(3)A bank shall establish and maintain the process of corporate governance in accordance with any requirements that may be prescribed in the Regulations relating to Banks.

[section 60B inserted by section 41 of Act 19 of 2003]

61. Appointment of auditor

(1)Notwithstanding the provisions of Chapter X of the Companies Act—

(a)no person shall hold office as auditor of a bank or a controlling company unless the appointment of such person as such an auditor has been approved by the Registrar; and

(b)any person contemplated in paragraph (a) shall be appointed for such period and on such conditions as may be prescribed.

[subsection (1) substituted by section 42(a) of Act 19 of 2003]

(2)A bank or a controlling company shall within 30 days of the appointment in accordance with the provisions of Chapter X of the Companies Act of a person as auditor thereof, apply to the Registrar on the prescribed form for the Registrar’s approval of such appointment.[subsection (2) substituted by section 14 of Act 9 of 1993 and by section 42(b) of Act 19 of 2003]

(3)The Registrar may—

(a)refuse an application under subsection (2) for the Registrar’s approval of the appointment of an auditor if—

(i)the application seeks the re-appointment of an auditor who has already served as auditor of the bank in question for the prescribed number of years consecutively; or

(ii)any grounds for withdrawal of approval listed in paragraph (b)(i) to (iv) apply to the proposed appointee; or

(b)withdraw any approval of the appointment of an auditor previously granted by the Registrar under this section, if such an auditor—

(i)has been convicted of an offence of which dishonesty is an element;

(ii)is found to be incompetent or unfit to perform the functions of an auditor;

(iii)is under investigation by the Public Accountants’ and Auditors’ Board;

(iv)fails to disclose any direct or indirect interests which may constitute a conflict of interest in respect of such auditor’s duties,

and thereupon the functions and responsibilities of that auditor in respect of that bank shall cease forthwith.

[subsection (3) substituted by section 42(c) of Act 19 of 2003]

(4)If the Registrar under paragraph (a) of subsection (3) refuses an application for his or her approval of the appointment of an auditor or under paragraph (b) of that subsection withdraws an approval previously granted by him or her, the board of directors of the bank or the controlling company concerned shall appoint another person as auditor and the provisions of subsections (1) and (2) shall apply mutatis mutandis in respect of the last-mentioned appointment.[subsection (4) substituted by section 42(d) of Act 19 of 2003]

(5)A person appointed under subsection (4) as auditor of a bank shall for the purposes of Chapter X of the Companies Act be deemed to have been so appointed as auditor at the immediately preceding annual general meeting of the bank.

(6)A person appointed under subsection (4) to replace an auditor whose approval has been withdrawn under subsection (3)(b) shall be appointed for the remainder of the period for which the person whom he or she replaces was appointed and is subject to the same conditions as his or her predecessor.[subsection (6) added by section 42(e) of Act 19 of 2003]

62. Appointment of auditor by Registrar

(1)If a bank for any reason fails to appoint an auditor the Registrar may, notwithstanding the provisions of sections 269 (4) and 271 (1) of the Companies Act, make the necessary appointment.

(2)A person appointed under subsection (1) as auditor of a bank shall be deemed to have been so appointed by that bank.[subsection (2) amended by section 25(b) of Act 9 of 1993]

63. Functions of auditor in relation to Registrar

(1)Notwithstanding anything to the contrary contained in the Public Accountants’ and Auditors’ Act, 1991 (Act No. 80 of 1991), or the Companies Act, but subject to the provisions of subsections (2) and (3) of this section, the auditor referred to in section 61 or 62—

(a)shall, whenever such auditor furnishes, in terms of section 20(5)(b) of the first-mentioned Act, the Public Accountants’ and Auditors’ Board with copies of the report, acknowledgement of receipt and reply and with the other particulars referred to in that section, relating to an irregularity or suspected irregularity in the conduct of the affairs of the bank for which such auditor has been appointed as auditor, also furnish the Registrar with such copies and particulars; and

(b)shall in writing inform the Registrar of any matter relating to the affairs of a bank—

(i)of which such auditor became aware in the performance of such auditor’s functions as auditor of that bank; and

(ii)which, in the opinion of such auditor, may endanger the bank’s ability to continue as a going concern or may impair the protection of the funds of the bank’s depositors or may be contrary to principles of sound management (including risk management) or amounts to inadequate maintenance of internal controls; and

(c)shall, if requested by the Registrar to do so, furnish him or her with written information relating to a matter referred to in paragraph (b), specified by the Registrar.

[subsection (1) amended by section 15 of Act 9 of 1993 and substituted by section 43(a) of Act 19 of 2003]

(2)Whenever an auditor by virtue of the provisions of subsection (1)(b) or (c) furnishes the Registrar with written information, such auditor may at the same time furnish the chief executive officer of the bank to which such information relates with a copy of the relevant document.[subsection (2) substituted by section 43(b) of Act 19 of 2003]

(3)The furnishing in good faith by an auditor of information in terms of subsection (1)(b) or (c) shall in no circumstances be held to constitute a contravention of any provision of the law or a breach of any provision of a code of professional conduct to which such auditor may be subject.[subsection (3) substituted by section 7(b) of Act 42 of 1992]

(4)Nothing in subsection (1) contained shall be construed as conferring upon any person any right of action against an auditor which, but for the provisions of that subsection, such person would not have had.[subsection (4) added by section 7(c) of Act 42 of 1992 and substituted by section 43(c) of Act 19 of 2003]

64. Audit committee

(1)Subject to the provisions of subsections (3) and (4), the board of directors of a bank shall appoint at least three of its members to form an audit committee.

(2)The functions of the audit committee shall be to—

(a)assist the board of directors in its evaluation of the adequacy and efficiency of the internal control systems, accounting practices, information systems and auditing processes applied within that bank in the day-to-day management of its business;

(b)facilitate and promote communication, regarding the matters referred to in paragraph (a) or any other related matter, between the board of directors and the executive officers of, the auditor appointed under section 61 or 62 for, and the employee charged with the internal auditing of the transactions of, the bank; and

(c)introduce such measures as in the committee's opinion may serve to enhance the credibility and objectivity of financial statements and reports prepared with reference to the affairs of the bank.

(d)perform such further functions as may be prescribed.[paragraph (d) added by section 44(a) of Act 19 of 2003]

(3)All of the members of the audit committee may be, and the majority of such members, including the chairperson of the audit committee, shall be, persons who are not employees of the bank nor of any of its subsidiaries, its controlling company or any subsidiary of its controlling company: Provided that the chairperson of the board of directors of the bank shall not be appointed as a member of the audit committee.[subsection (3) substituted by section 41 of Act 26 of 1994, by section 8 of Act 36 of 2000 and by section 44(b) of Act 19 of 2003]

(4)The board of directors of a bank shall be exempt from the duty to appoint an audit committee if such bank is a member of a group of companies in respect of which group annual financial statements are required to be made out in terms of section 288 (1) of the Companies Act, provided an audit committee has been appointed for the holding company in that group and such audit committee has assumed the responsibilities of an audit committee in respect of all the banks in that group.[subsection (4) amended by section 25(b) of Act 9 of 1993]

64A. Risk committee

(1)The board of directors of a bank shall appoint at least three of its members, of whom at least two are non-executive directors, to form a risk committee.

(2)The functions of the risk committee shall be to—

(a)assist the board in its evaluation of the adequacy and efficiency of the risk policies, procedures, practices and controls applied within that bank in the day-to-day management of its business;

(b)assist the board in the identification of the build up of and concentration of the various risks to which the bank is exposed;

(c)assist the board in developing a risk mitigation strategy to ensure that the bank manages the risks in an optimal manner;

(d)assist the board in ensuring that a formal risk assessment is undertaken at least annually;

(e)assist the board in identifying and regularly monitoring all key risks and key performance indicators to ensure that its decision-making capability and accuracy of its reporting is maintained at a high level;

(f)facilitate and promote communication, through reporting structures, regarding the matters referred to in paragraph (a) or any other related matter, between the board and the executive officers of the bank;

(g)ensure the establishment of an independent risk management function, and in the case where the bank forms part of a group, a group risk management function, the head of which shall act as the reference point for all aspects relating to risk management within the bank, including the responsibility to arrange training of members of the board in the different risk areas to which that bank is exposed;

(h)introduce such measures as may serve to enhance the adequacy and efficiency of the risk management policies, procedures, practices and controls applied within that bank;

(i)co-ordinate the monitoring of risk management on a globalised basis; and

(j)perform such further functions as may be prescribed.

[section 64A inserted by section 45 of Act 19 of 2003]

64B. Directors’ affairs committee

(1)The board of directors of a bank shall establish a directors’ affairs committee, consisting only of non-executive directors of the bank.

(2)The functions of the directors’ affairs committee shall be to—

(a)assist the board of directors in its determination and evaluation of the adequacy, efficiency and appropriateness of the corporate governance structure and practices of the bank;

(b)establish and maintain a board directorship continuity programme entailing—

(i)a review of the performance of and planning for successors to the executive directors;

(ii)measures to ensure continuity of non-executive directors;

(iii)a regular review of the composition of skills, experience and other qualities required for the effectiveness of the board; and

(iv)an annual assessment of the board as a whole and of the contribution of each individual director;

(c)assist the board in the nomination of successors to the key positions in the bank in order to ensure that a management succession plan is in place;

(d)assist the board in determining whether the employment of any director should be terminated;

(e)assist the board in ensuring that the bank is at all times in compliance with all applicable laws, regulations and codes of conduct and practices; and

(f)perform such further functions as may be prescribed.

[section 64B inserted by section 45 of Act 19 of 2003]

65. Forwarding of certain notices, reports, returns and financial statements to Registrar

(1)Whenever a bank or controlling company—

(a)forwards a notice of a meeting or of the declaration of a dividend or a report on its activities during a financial year or part of such year to its shareholders;

(b)gives notice to the Registrar of Companies in terms of section 170(2) of the Companies Act of any intended change in the situation of its registered office or of its postal address;

(c)forwards in terms of section 216 (2) of the Companies Act a return referred to in that section regarding its directors to the Registrar of Companies; or

(d)forwards in terms of section 302 (4) of the Companies Act financial statements to the Registrar of Companies,

it shall simultaneously forward a copy of such notice, report, return or statements to the Registrar.

(2)A bank or controlling company shall within 30 days after a general meeting of shareholders forward to the Registrar a copy of the minutes to be kept in respect of such meeting in terms of section 204 of the Companies Act.

66. Disclosure of issued share capital

If a bank publishes any statement or issues any document in which the amount of its authorized share capital is mentioned, the amount of its issued share capital shall also be mentioned in such statement or document.

67. Disclosure of names of certain shareholders

If, in the case of an individual shareholder in a bank who holds more than 25 per cent of all the issued shares in that bank to which voting rights are attached, the sum of the amounts of such bank's investments with or loans or advances or other exposures to such individual shareholder exceeds the total nominal value of the said shares so held by that individual shareholder, the bank shall in its financial statements mention the name of such individual shareholder.[section 67 amended by section 25(b) of Act 9 of 1993]

68. Special provisions relating to winding-up or judicial management of bank

(1)Notwithstanding the provisions of section 69 of this Act and anything to the contrary contained in the Companies Act—

(a)the Registrar shall have the right to apply to a competent court for the winding-up of any bank in terms of the Companies Act, and the Registrar shall have the right to oppose any such application made by any other person;

(b)no person other than a person recommended by the Registrar shall be appointed by a Master of the High Court as provisional liquidator or liquidator of a bank; and

(c)the Master shall appoint a person designated by the Registrar, who shall be a person who in the opinion of the Registrar has wide experience of, and is knowledgeable about the latest developments in, the banking industry, to assist a provisional liquidator or liquidator referred to in paragraph (b) in the performance of the functions of such provisional liquidator or liquidator in respect of the bank in question.[paragraph (c) substituted by section 46(a) of Act 19 of 2003]

[subsection (1) amended by section 16 and 25(b) of Act 9 of 1993, by section 42(a), 42(b) and 42(c) of Act 26 of 1994 and substituted by section 9(a) of Act 36 of 2000]

(1A)The appointment by the Master of a person in terms of subsection (1)(c) shall be by means of a letter of appointment addressed by the Master to the person appointed and in which is set out—

(a)the name of the bank in respect of which such person is appointed;

(b)directions in regard to the remuneration of the person appointed; and

(c)such other directions incidental to the matter as the Master or the Registrar may deem necessary,

and a copy of such letter of appointment shall be furnished by the Master to the provisional liquidator or liquidator concerned.[subsection (1A) inserted by section 42(d) of Act 26 of 1994 and amended by section 9(b) of Act 36 of 2000]

(2)During the voluntary winding-up of any bank the liquidator shall furnish the Registrar with such return or statement which the bank concerned would have been obliged to furnish to the Registrar in terms of this Act, were such bank not being wound up, as the Registrar may require.[subsection (2) amended by section 25(b) of Act 9 of 1993 and substituted by section 42(e) of Act 26 of 1994]

(3)In the application, in relation to the winding-up of a company which is a deposit-taking institution—

(a)of section 346 of the Companies Act, subsection (4) of that section shall be deemed to have been amended to read as follows:"

(4)

(a)Before an application for the winding-up of a company which is a bank is presented to the Court, a copy of the application and of every affidavit confirming the facts stated therein shall be lodged with the Registrar of Banks and with the Master, or if there is no Master at the seat of the Court, with an officer in the public service designated for that purpose by the Master by notice in the Gazette.

(b)The Registrar of Banks or the Master or any such officer may report to the court any facts ascertained by such Registrar, Master or officer which appear to such Registrar, Master or officer to justify the Court in postponing the hearing or dismissing the application, and shall transmit a copy of that report to the applicant or the agent of such applicant and to the said company"; and

[paragraph (a) substituted by section 46(b) of Act 19 of 2003]

(b)of section 357 of the Companies Act, subsection (3) of that section shall be deemed to have been amended to read as follows:"

(3)A copy of every special resolution for the voluntary winding-up of any company which is a deposit-taking institution, passed under section 349, and of every order of court amending or setting aside the proceedings in relation to the winding-up shall, within fourteen days after the registration of the resolution in terms of section 200 or the making of the order, be transmitted by that company to the officers and registrars referred to in paragraphs (a), (b) and (c) of subsection (1), as well as to the Registrar of Deposit-taking Institutions.".

(4)[subsection (4) deleted by section 9(c) of Act 36 of 2000]

(5)Notwithstanding anything to the contrary contained in any law, the suspension, cancellation or termination of the registration of a bank while such bank, as a result of an application brought by the Registrar, is being wound up in terms of this section, shall not affect—

(a)any order or appointment made, direction issued or any other thing done under this section or in terms of the Companies Act, in respect of such bank; or

(b)any power to be exercised, duty to be executed or right to be enforced in respect of such bank by the Registrar, the Master of the High Court or the provisional liquidator or liquidator, respectively, by virtue of the provisions of this section or the provisions of the Companies Act,

and the Registrar, the Master of the High Court, the provisional liquidator or liquidator, respectively, shall continue to exercise their respective powers and to perform their respective duties under this section or in terms of the Companies Act, in respect of the public company of which the registration as a bank has been so suspended, cancelled or terminated, as if such suspension, cancellation or termination had not taken place.[subsection (5) added by section 42(f) of Act 26 of 1994 and substituted by section 9(d) of Act 36 of 2000]

69. Appointment of curator to bank

(1)

(a)If, in the opinion of the Registrar, any bank will be unable to repay, when legally obliged to do so, deposits made with it or will probably be unable to meet any other of its obligations, the Minister may, if he or she deems it desirable in the public interest, with the written consent of the chief executive officer or the chairperson of the board of directors of that bank, appoint a curator to the bank.[paragraph (a) previously subsection (1), renumbered by section 8(a) of Act 42 of 1992, amended by section 25(b) of Act 9 of 1993, substituted by section 43(a) of Act 26 of 1994, by section 10(a) of Act 36 of 2000, and by section 47(a) of Act 19 of 2003]

(b)The Registrar may appoint a person, other than a person who is in the employ of the bank under curatorship, who in the opinion of the Registrar has wide experience of and is knowledgeable about the specific field of activities in which the bank under curatorship is predominantly engaged, to assist the curator in the management of the affairs of the bank under curatorship.[paragraph (b) added by section 8(a) of Act 42 of 1992 and substituted by section 43(b) of Act 26 of 1994]

(c)The person appointed in terms of paragraph (b) shall in respect of the services rendered by that person pursuant to his or her appointment be paid such remuneration out of the funds of the bank under curatorship as the Registrar may after consultation with the curator determine.[paragraph (c) added by section 8(a) of Act 42 of 1992 and substituted by section 47(b) of Act 19 of 2003]

(2)The Minister shall appoint a curator by letter of appointment which shall set out—

(a)the name of the bank in respect of which the curator is appointed and the address of its head office;

(b)directions in regard to the security which the curator has to furnish for the proper performance of his or her duties;[paragraph (b) substituted by section 47(c) of Act 19 of 2003]

(c)directions in regard to the remuneration of the curator; and

(d)such other directions as to the management of the bank concerned or any matter incidental thereto, including directions in regard to the raising of money by that bank, as the Minister may deem necessary.[paragraph (d) amended by section 25(b) of Act 9 of 1993]

(2A)On appointment of a curator—

(a)the management of the bank concerned shall vest in the curator, subject to the supervision of the Registrar, and any other person vested with the management of the affairs of that bank shall be divested thereof; and

(b)the curator shall recover and take possession of all the assets of the bank.

[subsection (2A) inserted by section 10(b) of Act 36 of 2000]

(2B)The curator shall—

(a)subject to the supervision of the Registrar, conduct the management contemplated in subsection (2A)(a) in such a manner as the Registrar may deem to best promote the interests of the creditors of the bank concerned and of the banking sector as a whole;

(b)comply with any direction of the Registrar;

(c)keep such accounting records and prepare such annual financial statements, interim reports and provisional annual financial statements as the bank or its directors would have been obliged to keep or prepare if the bank had not been placed under curatorship;

(d)convene the annual general meeting and any other meeting of members of the bank provided for by the Companies Act and, in that regard, comply with all the requirements with which the directors of the bank would in terms of the Companies Act have been obIiged to comply if the bank had not been placed under curatorship; and

(e)have the power to bring or defend in the name and on behalf of the bank any action or other legal proceedings of a civil nature and, subject to the provisions of any law relating to criminal proceedings, any criminal proceedings.

[subsection (2B) inserted by section 10(b) of Act 36 of 2000]

(2C)

(a)Notwithstanding the provisions of subsection (3), the curator may dispose of any of the bank’s assets in the ordinary course of the bank’s business.

(b)Except in the circumstances contemplated in paragraph (a) the curator may not, notwithstanding the provisions of section 228 of the Companies Act—

(i)dispose of any of the bank’s assets otherwise than in accordance with the provisions of section 54;

(ii)effect a disposal referred to in subparagraph (i) unless a reasonable probability exists that such disposal will enable the bank to pay its debts or meet its obligations and become a successful concern.

[subsection (2C) inserted by section 10(b) of Act 36 of 2000]

(2D)If at any time the curator is of the opinion that there is no reasonable probability that the continuation of the curatorship will enable the bank to pay its debts or meet its obligations and become a successful concern, the curator shall forthwith in writing inform the Registrar of such opinion.[subsection (2D) inserted by section 10(b) of Act 36 of 2000 and substituted by section 47(d) of Act 19 of 2003]

(2E)Any money of the bank that becomes available to the curator shall be applied by him or her in paying the costs of the curatorship and in the conduct of the bank’s business in accordance with the requirements of the curatorship and, as far as the circumstances permit, in the payment of the claims of creditors which arose before the date of the curatorship.[subsection (2E) inserted by section 10(b) of Act 36 of 2000 and substituted by section 47(e) of Act 19 of 2003]

(2F)

(a)Every disposition of its property, which if made by an individual could for any reason be set aside in the event of such individual’s insolvency, may, if made by a bank that is unable to pay its debts, be set aside by a court at the suit of the curator in the event of that bank being placed under curatorship, and the provisions of the law relating to insolvency shall mutatis mutandis apply in respect of such disposition.

(b)For the purposes of this subsection the event which shall be deemed to correspond with a sequestration order under the Insolvency Act, 1936 (Act No. 24 of 1936), in the case of an insolvent, shall be the presentation to the Court of the letter of appointment of the curator.

[subsection (2F) inserted by section 10(b) of Act 36 of 2000]

(2G)The period during which any bank that is a mortgage debtor in respect of any mortgage bond is subject to curatorship in terms of this section shall be excluded in the calculation of any period of time for the purpose of determining whether such mortgage bond confers any preference in terms of section 88 of the Insolvency Act, 1936, as applied to the winding-up of banks in terms of this Act.[subsection (2G) inserted by section 10(b) of Act 36 of 2000]

(3)The Minister may, in the letter of appointment or at any time subsequent thereto, empower the curator in his or her discretion, but subject to any condition which the Minister may impose—

(a)to suspend or reduce, as from the date of the curator’s appointment as such or any subsequent date, the right of creditors of the bank concerned to claim or receive interest on any money owing to them by that bank;[paragraph (a) substituted by section 47(g) of Act 19 of 2003]

(b)to make payments, whether in respect of capital or interest, to any creditor or creditors of the bank concerned at such time, in such order and in such manner as the curator may deem fit;[paragraph (b) amended by section 8(b) of Act 42 of 1992 and substituted by section 47(g) of Act 19 of 2003]

(c)to cancel any agreement between the bank concerned and any other party to advance moneys due after the date of the curator’s appointment as such, or to cancel any agreement to extend any existing facility, if, in the opinion of the curator, such advance or any loan under such facility would not be adequately secured or would not be repayable on terms satisfactory to the curator or if the bank lacks the necessary funds to meet its obligations under any such agreement or if it would not otherwise be in the interests of the bank;[paragraph (c) substituted by section 47(g) of Act 19 of 2003]

(d)to convene from time to time, in such manner as the curator may deem fit, a meeting of creditors of the bank concerned for the purpose of establishing the nature and extent of the bank’s indebtedness to such creditors and for consultation with such creditors in so far as their interests may be affected by decisions taken by the curator in the course of the management of the affairs of the bank concerned;[paragraph (d) added by section 8(c) of Act 42 of 1992 and substituted by section 47(g) of Act 19 of 2003]

(e)to negotiate with any individual creditor of the bank concerned with a view to the final settlement of the affairs of such creditor with the bank;[paragraph (e) added by section 8(c) of Act 42 of 1992]

(f)to make and carry out, in the course of the curator's management of the bank concerned, any decision which in terms of the provisions of the Companies Act would have been required to be made by way of a special resolution contemplated in section 199 of the said Act;[paragraph (f) added by section 8(c) of Act 42 of 1992 and substituted by section 47(h) of Act 19 of 2003]

(g)to cancel any lease of movable or immovable property entered into by the bank concerned prior to its being placed under curatorship: Provided that, notwithstanding the provisions of subsection (6), a claim for damages in respect of such cancellation may be instituted against the bank after the expiration of a period of one year as from the date of such cancellation;[paragraph (g) added by section 8(c) of Act 42 of 1992]

(h)[paragraph (h) added by section 8(c) of Act 42 of 1992 and deleted by section 10(c) of Act 36 of 2000]

(i)to cancel any guarantee issued by the bank concerned prior to its being placed under curatorship, excluding such guarantee which the bank is required to make good within a period of 30 days as from the date of the appointment of the curator: Provided that, notwithstanding the provisions of subsection (6), a claim for damages in respect of any loss sustained by or damage caused to any person as a result of the cancellation of a guarantee in terms of this paragraph, may be instituted against the bank after the expiration of a period of one year as from the date of such cancellation.[paragraph (i) added by section 8(c) of Act 42 of 1992]

[subsection (3) amended by section 25(b) of Act 9 of 1993 and by section 47(f) of Act 19 of 2003]

(3A)The curator shall duly record the nature of and the reasons for each act performed by the curator under any power conferred upon the curator in terms of subsection (3), and such records shall be examined as part of the normal audit performed in respect of the affairs of the bank concerned.[subsection (3A) inserted by section 8(d) of Act 42 of 1992, amended by section 25(b) of Act 9 of 1993, and substituted by section 47(i) of Act 19 of 2003]

(4)The Minister may, at any time and in any manner, amend the directions in the letter of appointment, and the powers granted by the Minister under subsection (3) to the curator.[subsection (4) substituted by section 10(d) of Act 36 of 2000 and by section 47(j) of Act 19 of 2003]

(5)[subsection (5) amended by section 25(b) of Act 9 of 1993 and deleted by section 10(e) of Act 36 of 2000]

(6)While such bank is under curatorship—

(a)all actions, legal proceedings, the execution of all writs, summonses and other legal process against that bank shall be stayed and not be instituted or proceeded with without the leave of the court; and

(b)[paragraph (b) deleted by section 6(a) of Act 55 of 1996]

[subsection (6) amended by section 25(b) of Act 9 of 1993]

(6A)While a bank is under curatorship the curator shall on a monthly basis furnish the Registrar with a written report containing an exposition of the affairs of the bank concerned and in which it is stated whether or not, in the opinion of the curator, a reasonable probability exists that the bank will be able to pay its debts or to meet its obligations and to become a successful concern.[subsection (6A) inserted by section 17 of Act 9 of 1993 and substituted by section 10(f) of Act 36 of 2000]

(6B)Notwithstanding any provision to the contrary contained in this Act, sections 35A, 35B and 46 of the Insolvency Act, 1936 (Act No. 24 of 1936), shall mutatis mutandis apply to the curator of any bank under curatorship and to such a bank as if the curator were a trustee of an insolvent estate and the bank were an insolvent or a sequestrated estate as contemplated in those sections.[subsection (6B) inserted by section 6(b) of Act 55 of 1996]

(7)The Registrar shall as soon as is practicable announce the appointment of a curator and the powers granted to the curator on the appointment of the curator, and any amendment or withdrawal of such powers, by notice in the Gazette.[subsection (7) substituted by section 47(k) of Act 19 of 2003]

(8)Notwithstanding anything to the contrary contained in any law, the suspension, cancellation or termination of the registration of a bank while such bank is under curatorship in terms of this section shall not affect—

(a)any appointment made, direction issued, or any other thing done under this section in respect of such bank; or

(b)any power to be exercised or duty to be executed in respect of that bank under curatorship by the Minister, the Registrar or the curator, by virtue of the provisions of this section,

and the Minister, the Registrar and the curator, respectively, shall until such time as the curatorship is terminated continue to exercise their respective powers and to execute their respective duties under this section in respect of the public company of which the registration as a bank has been so suspended, cancelled or terminated, as if such suspension, cancellation or termination had not taken place.[subsection (8) added by section 43(c) of Act 26 of 1994]

(9)The Minister may—

(a)at any time withdraw the appointment of a curator;

(b)upon application by the Registrar withdraw the appointment of a curator.

[subsection (9) added by section 10(g) of Act 36 of 2000]

(10)Curatorship of a bank shall lapse upon—

(a)the issue by the Minister of written notification to that effect to the curator; or

(b)the winding-up of the bank in terms of the provisions of section 68.

[subsection (10) added by section 10(g) of Act 36 of 2000]

69A. Investigation of affairs of bank under curatorship

(1)While a bank is under curatorship, the Registrar may appoint a person to be a commissioner for the purpose of investigating the business, trade, dealings, affairs or assets and liabilities of that bank or of its associate or associates.

(2)The Registrar may appoint a person as an assistant or two or more persons as assistants to the commissioner referred to in subsection (1) in order to assist the commissioner, subject to the control and directions of the Registrar, in an investigation contemplated in subsection (1).[subsection (2) substituted by section 48(a) of Act 19 of 2003]

(3)Before the Registrar appoints a commissioner in terms of subsection (1) or a person or persons in terms of subsection (2), the Registrar shall take all reasonable steps to ensure that the person or persons so appointed will be able to report objectively and impartially on the affairs of the bank concerned or the associate or associates of such bank.[subsection (3) substituted by section 48(b) of Act 19 of 2003]

(4)A commissioner appointed under subsection (1) and any person or persons appointed under subsection (2) shall for the purpose of their functions in terms of this section have powers and duties in all respects corresponding to the powers and duties conferred or imposed by sections 4 and 5 of the Inspection of Financial Institutions Act, 1998 (Act No. 80 of 1998), upon a registrar or an inspector contemplated in the Inspection of Financial Institutions Act, 1998: Provided that for the purposes of this section—

(a)any reference to an 'institution' or a 'financial institution' in sections 4 and 5 of the Inspection of Financial Institutions Act, 1998, shall be deemed to be a reference to a bank under curatorship or any of its associates; and

(b)any reference to 'the registrar' and 'an inspector' in sections 4 and 5 of the Inspection of Financial Institutions Act, 1998, shall be deemed to be a reference to the commissioner and any person appointed under subsection (2), respectively.

[subsection (4) substituted by section 48(c) of Act 19 of 2003]

(5)When an investigation is made under this section and section 4 of the Inspection of Financial Institutions Act, 1998 (Act No. 80 of 1998), applies, subsection (1)(a) of that section shall be deemed to have been amended to read as follows:"

(1)In carrying out an investigation into the business, trade, dealings, affairs or assets and liabilities of a bank under curatorship, a commissioner may—

(a)administer an oath or affirmation or otherwise examine any person who is, or formerly was, a director, servant, employee, partner, member or shareholder of the institution: Provided that the person examined, whether under oath or not, may have his or her legal adviser present at the examination: Provided further that on good cause shown the commissioner may direct that the proceedings under this paragraph shall be held in camera and not be accessible to the public;"

[subsection (5) substituted by section 48(d) of Act 19 of 2003]

(5A)

Banks Act, 1990

Act 94 of 1990

Taxonomies

Related documents

Banks Act, 1990

Act 94 of 1990

Chapter IInterpretation and application of Act

1. Definitions

2. Exclusions from application Act

Chapter IIAdministration of Act

3. Office for Banks

4. Registrar and Deputy Registrar of Banks

5. Delegation of powers and assignment of functions by Registrar

6. Powers of inspection of, and guide-lines by, Registrar

7. Furnishing of information by banks

8. Power of Registrar to extend certain periods

9. Review of decisions of Registrar

10. Annual report by Registrar

Chapter IIIAuthorization to establish, and registration and cancellation of registration of banks

11. Registration a prerequisite for conducting business of bank

12. Application for authorization to establish bank

13. Granting or refusal of application for authorization

14. Revocation of authorization

15. Formation of certain companies prohibited except with approval of Registrar

16. Application for registration as bank

17. Granting or refusal of application for registration

18. Conditions of registration

18A. Branches of foreign institutions

18B. Cancellation or suspension of authorization by Registrar and notice by Registrar of intention to cancel or suspend authorization

19. ***

20. ***

21. Untrue information in connection with applications

22. Use of name of bank

23. Cancellation or suspension of registration by Registrar

24. Notice by Registrar of intention to cancel or suspend registration

25. Cancellation or suspension of registration by court

26. Restriction by Registrar of activities of bank

27. Cancellation of registration at request of bank

28. Cancellation of registration upon winding-up

29. Withdrawal of suspension or restriction

30. Publication of information relating to banks and representative offices of foreign institutions

31. Date on which registration lapses

32. Repayment of deposits upon lapse of registration

33. Reregistration in terms of this Act

33A. Reregistration after commencement of Banks Amendment Act, 1994

34. Representative offices of foreign institutions

35. Annual licence

Chapter IVShareholding in, and registration of controlling companies in respect of, banks

36. ***

37. Permission for acquisition of shares in bank or controlling company

38. Registration of shares in name of nominees

39. Furnishing of information by shareholders

40. Absence of wrongful intent

41. Effects of registration of shares contrary to Act

42. Restriction of right to control bank

43. Application for registration as controlling company

44. Granting or refusal of application for registration as controlling company

45. Cancellation by Registrar of registration of controlling company

46. Cancellation by court of registration of controlling company

47. Cancellation of registration at request of controlling company

48. Lapse of registration of controlling company upon cancellation of registration of bank

49. Date on which registration of controlling company lapses

50. Investments by controlling companies

Chapter VFunctioning of banks and controlling companies with reference to Companies Act

51. Application of Companies Act to banks and controlling companies

52. Subsidiaries, branch offices, other interests and representative offices of banks and controlling companies

53. Disclosure by banks and controlling companies of interest in subsidiaries, trusts and other undertakings

54. Compromises, amalgamations, arrangements and affected transactions

55. Reconstruction within group of companies

56. Alteration of memorandum or association or articles of association, and change of name

57. Alteration of memorandum of association or articles of association in accordance with direction of Registrar

58. Information regarding directors and officers

59. Returns regarding shareholders

60. Directors of bank or controlling company

60A. Compliance function

60B. Corporate governance

61. Appointment of auditor

62. Appointment of auditor by Registrar

63. Functions of auditor in relation to Registrar

64. Audit committee

Chapter I
Interpretation and application of Act

Chapter II
Administration of Act

Chapter III
Authorization to establish, and registration and cancellation of registration of banks

Chapter IV
Shareholding in, and registration of controlling companies in respect of, banks

Chapter V
Functioning of banks and controlling companies with reference to Companies Act