Banks Act, 1990 (Act No. 94 of 1990)Chapter I : Interpretation and Application of Act1. Definitions |
| (1) | In this Act, unless the context otherwise indicates— |
means—
| (a) | those shares that do not represent the most subordinated claim in liquidation but which shares are subordinated to depositors, general creditors and any relevant subordinated debt, and which shares— |
| (i) | do not constitute common equity tier 1 capital; and |
| (ii) | comply with such further criteria or conditions as may be prescribed; |
| (b) | such component of, percentage of or component and percentage of minority interest in specified issued instruments or shares, and arising from the consolidation of accounts and calculated in such a manner, as may be prescribed; |
| (c) | capital obtained through the issue of prescribed categories of preferred securities; |
[Definition inserted by section 1(a) of Act No. 22 of 2013]
means—
| (a) | share premium arising from the issue of instruments or shares constituting additional tier 1 capital; |
| (b) | such component of, percentage of or component and percentage of accumulated other comprehensive income and other disclosed reserves arising from compliance with Financial Reporting Standards as may be prescribed; |
[Definition inserted by section 1(a) of Act No. 22 of 2013]
"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;
"allocated capital and reserve funds"
means such amount of qualifying capital and reserve funds as may be approved and assigned by the board of directors of a bank as capital and reserve funds designated to provide for the risks pertaining to the particular nature of such bank's business as contemplated in section 70(2), 70(2A) or 70(2B), as the case may be;
[Definition inserted by section 1(a) of Act No. 20 of 2007]
"Authority"
means the Prudential Authority established in terms of section 32 of the Financial Sector Regulation Act.
[Definition inserted by section 290, Item 1(a) in Schedule 4, of Act No. 9 of 2017]]
"bank"
means a public company registered as a bank in terms of this Act;
[Definition substituted by section 1(a) of Act No. 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 a 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 inserted by section 1(a) of Act No. 36 of 2000]
means a committee of the Bank for International Settlements, the secretariat of which consists of supervisors from central banks and other authorities of member countries and is located in Basel, Switzerland;
[Definition inserted by section 1(b) of Act No. 22 of 2013]
"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 inserted by section 1(a) of Act No. 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 inserted by section 1(a) of Act No. 36 of 2000]
"board of review"
[Definition deleted by section 290, item 1(b) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) - effective 28 September 2018 (paragraph (c)(ii) of Notice No. 1019, GG 41947, dated 28 September 2018)]
"chief executive officer"
| (a) | 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; |
| (b) | in relation to a branch, means a person who, either alone or jointly, with one or more other persons, is responsible for the conduct of the business of the branch; |
[Definition substituted by section 1(b) of Act No. 20 of 2007]
"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 substituted by section 1(a) of Act No. 19 of 2003]
"Commission"
means the Companies and Intellectual Property Commission established by section 185 of the Companies Act;
[Definition of inserted by section 1(c) of Act No. 22 of 2013]
"Commissioner"
means the Commissioner appointed in terms of section 189 of the Companies Act;
[Definition inserted by section 1(c) of Act No. 22 of 2013]
"common equity tier 1 capital"
means—
| (a) | those shares that represent the most subordinated claim in liquidation, and which shares— |
| (i) | absorb the first and proportionately greatest share of any losses as the losses occur; |
| (ii) | absorb losses proportionately and pari passu on a going concern basis; and |
| (iii) | comply with such further criteria or conditions as may be prescribed; |
| (b) | such component of, percentage of or component and percentage of minority interest in specified issued instruments or shares, and arising from the consolidation of accounts and calculated in such a manner, as may be prescribed, |
but does not include shares issued in pursuance of the capitalisation of reserves resulting from a revaluation of assets;
[Definition inserted by section 1(c) of Act No. 22 of 2013}
"common equity tier 1 unimpaired reserve funds"
means—
| (a) | share premium arising from the issue of instruments or shares constituting common equity tier 1 capital; |
| (b) | retained earnings; |
| (c) | such component of, percentage of or component and percentage of accumulated other comprehensive income and other disclosed reserves arising from compliance with Financial Reporting Standards, as may be prescribed; |
[Definition inserted by section 1(c) of Act No. 22 of 2013]
"Companies Act"
means the Companies Act, 2008 (Act No. 71 of 2008);
[Definition substituted by section 1(d) of Act No. 22 of 2013]
"company"
means a company under the Companies Act;
has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(c) in Schedule 4, of Act No. 9 of 2017]]
"consolidating supervisor"
means—
| (a) | in relation to a foreign supervisor, the supervisor that is responsible for the regulation and supervision, on a consolidated basis, of a foreign institution that is incorporated in that foreign jurisdiction and which conducts a business similar to the business of a bank or controlling company; or |
| (b) | the Authority, in terms of his or her functions and responsibilities to regulate and supervise a bank, controlling company or banking group on a consolidated basis; |
[Definition inserted by section 1(c) of Act No. 20 of 2007]
"control"
with reference to the control of a company, includes the meaning as provided for in section 2(2) of the Companies Act;
[Definition inserted by section 1(e) of Act No. 22 of 2013]
"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 Co-operatives Act, 2005 (Act No.14 of 2005);
[Definition substituted by section 1(f) of Act No. 22 of 2013]
"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 inserted by section 1(b) of Act No. 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 No. 55 of 1996]
| (b) | no interest 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, 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 long-term insurer as defined in section 1 of the Long-term Insurance Act, 1998 (Act No. 52 of 1998), as a premium in respect of any kind of policy defined or referred to in the Long-term Insurance Act, 1998, and under which policy that long-term insurer assumes, in return for such premium, such obligation as is described in the Long-term Insurance Act, 1998; |
[Paragraph (vi) substituted by section 1(d) of Act No. 20 of 2007]
| (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 No. 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) inserted by section 1(c) of Act No. 42 of 1992]
| (ix) | paid by any person to a registered short-term insurer as defined in section 1 of the Short-term Insurance Act, 1998 (Act No. 53 of 1998), as a premium in respect of any kind of policy defined or referred in the Short-term Insurance Act, 1998, and under which policy that short-term insurer assumes, in return for such premium, the obligation described in the Short-term Insurance Act, 1998; |
[Paragraph (ix) inserted by section 1(e) of Act No. 20 of 2007]
and "deposit" when used as a verb, or any derivative thereof, has a corresponding meaning;
"deposit-taking institution"
[Definition deleted by section 1(b) of Act No. 9 of 1993 and replaced by the definition of "bank"]
"director"
has the meaning ascribed to that word in section 1 of the Companies Act, and includes an executive director and a non-executive director, unless expressly stated otherwise;
[Definition substituted by section 1(g) of Act No. 22 of 2013]
"division"
in relation to a bank, means a business unit or section of that bank that conducts its business—
| (a) | under a name that includes the word "bank" or any derivative thereof, or the words "deposit-taking institution" or "building society" or any derivative thereof; and |
| (b) | under the instruction and within the governance structures of the bank concerned; |
[Definition inserted by section 1(f) of Act No. 20 of 2007]
"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 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; |
[Paragraph (b) substituted by section 1(h) of Act No. 22 of 2013]
| (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 Authority as domestic shareholders for the purposes of this Act; |
"eligible institution"
means an external credit assessment institution or an export credit agency that meets the minimum requirements as prescribed and which institution or agency has been approved in writing by the Authority;
[Definition inserted by section 1(g) of Act No. 20 of 2007]
"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 substituted by section 1(d) of Act No. 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 substituted by section 1(e) of Act No. 19 of 2003]
"external credit assessment"
means an assessment or a rating issued by an eligible institution, which assessment or rating—
| (a) | relates to the ongoing ability of a person or a country to repay amounts due and payable by the said person or the said country, including any principal amount and related interest; and |
| (b) | meets such requirements as may be prescribed; |
[Definition inserted by section 1(h) of Act No. 20 of 2007]
"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;
means the Financial Sector Regulation Act, 2017;
[Definition inserted by section 290, item 1(d) in Schedule 4, of Act No. 9 of 2017]]
"financial statements"
means annual financial statements referred to in section 30 of the Companies Act;
[Definition substituted by section 1(i) of Act No. 22 of 2013]
"foreign shareholder"
in relation to a bank or a 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"
has the meaning ascribed to that expression in section 1 of the Companies Act;
[Definition substituted by section 1(j) of Act No. 22 of 2013]
"host supervisor"
means—
| (a) | in respect of a foreign supervisor, the supervisor that is responsible for the regulation and supervision of any branch, subsidiary, joint venture or related entity of a bank or controlling company, incorporated or operating within its jurisdiction; or |
| (b) | the Authority, in terms of his or her functions and responsibilities to regulate or supervise a foreign institution that is incorporated and conducts business similar to the business of a bank in a foreign country and which has been authorized and registered to conduct the business of a bank within the Republic; |
[Definition inserted by section 1(i) of Act No. 20 of 2007]
"hybrid-debt instrument"
means a financial instrument that combines certain features of equity financial instruments and debt financial instruments;
[Definition inserted by section 1(i) of Act No. 20 of 2007]
"Land Bank"
means the Land and Agricultural Bank of South Africa;
"liquid assets"
[Definition substituted by "level one high-quality liquid assets" and "level two high-quality liquid assets" by section 1(k) of Act No. 22 of 2013]
"level one high-quality liquid assets"
means—
| (a) | cash; |
| (b) | gold coin and bullion; |
| (c) | such percentage or amount of central bank reserves as may be determined by the Governor of the Reserve Bank from time to time; |
| (d) | marketable securities representing claims on or claims guaranteed by sovereigns, central banks, non-central government public sector entities, the Bank for International Settlements, the International Monetary Fund, the European Commission or multilateral development banks that comply with such requirements or such conditions as may be prescribed; |
[Definition inserted by section 1(k) of Act No. 22 of 2013 as the substitution for "liquid assets"]
"level two high-quality liquid assets"
means—
| (a) | marketable securities representing claims on or claims guaranteed by sovereigns, central banks, non-central government public sector entities or multilateral development banks that comply with such requirements or such conditions as may be prescribed; |
| (b) | such corporate bonds that comply with such requirements or such conditions as may be prescribed; |
[Definition inserted by section 1(k) of Act No. 22 of 2013 as the substitution for "liquid assets"]
"Minister"
means the Minister of Finance;
"money broker"
[Definition deleted by section 1(d) of Act No. 42 of 1992]
"money broking"
[Definition deleted by section 1(d) of Act No. 42 of 1992]
"mutual bank"
means a mutual bank as defined in section 1(1) of the Mutual Banks Act, 1993 (Act No. 124 of 1993);
[Definition inserted by section 1(d) of Act No. 26 of 1994]
"mutual building society"
[Definition deleted by section 1(c) of Act No. 26 of 1994]
"person"
includes any partnership;
"prescribed"
[Definition deleted by section 290, item 1(e) in Schedule 4, of Act No. 9 of 2017]]
"primary share capital"
[Definition deleted by section 1(l) of Act No. 22 of 2013]
"primary unimpaired reserve funds"
[Definition deleted by section 1(l) of Act No. 22 of 2013]
has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(f) in Schedule 4, of Act No. 9 of 2017]]
"public"
includes a juristic person;
"public company"
has the meaning ascribed to that expression in section 1 of the Companies Act, and includes a national state-owned company as envisaged in paragraph (a) of the definition of "state-owned company" in section 1 of the Companies Act;
[Definition substituted by section 10 of the Financial Matters Amendment Act, 2019 (Act No. 18 of 2019), Notice No. 799, GG 42482, dated 23 May 2019]
"qualifying capital and reserve funds"
means the net sum of capital and reserve funds required to be held by a bank, calculated and determined in accordance with the provisions of section 70(2), 70(2A) or 70(2B), as the case may be, having regard to the nature of such bank's business;
[Definition inserted by section 1(l) of Act No. 20 of 2007]
means the Financial Sector Information Register referred to in section 256 of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(g) in Schedule 4, of Act No. 9 of 2017]]
"Registrar"
[Definition deleted by section 290, item 1(h) in Schedule 4, of Act No. 9 of 2017]]
"Registrar of Companies"
[Definition deleted by section 1(n) of Act No. 22 of 2013]
"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 inserted by section 1(e) of Act No. 36 of 2000]
"Regulations relating to Banks’ Financial Instrument Trading"
[Definition deleted by section 1(m) of Act No. 20 of 2007]
means the Regulations titled 'Conditions for the conducting of the business of a bank by a foreign institution by means of a branch in the Republic' published by Government Notice No. 30627 of 1 January 2008, and amended from time to time;
[Definition substituted by section 1(o) of Act No. 22 of 2013]
"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 from 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 shareholder", includes any state the territory of which formerly formed part of the Republic;
"Reserve Bank"
means the South African Reserve Bank;
"secondary capital"
[Definition deleted by section 1(p) of Act No. 22 of 2013]
"secondary unimpaired reserve funds"
[Definition deleted by section 1(p) of Act No. 22 of 2013]
"securitisation scheme"
means a synthetic securitisation scheme or a traditional securitisation scheme as defined in Government Notice R. 681 published in Government Gazette No. 26415 on 4 June 2004;
[Definition inserted by section 1(p) of Act No. 20 of 2007]
"subsidiary"
means a subsidiary as defined in section 3 of the Companies Act;
[Definition substituted by section 1(q) of Act No. 22 of 2013]
"tertiary capital"
[Definition deleted by section 1(r) of Act No. 22 of 2013]
"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(e) of Act No. 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 No. 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 Authority 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— |
[Words preceding subparagraph (i) of the proviso to subparagraph (aa) of the definition substituted by section 1(i) of Act No. 19 of 2003]
| (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) of the proviso to subparagraph (aa) substituted by section 1(j) of Act No. 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 Authority, with the approval of the Minister, by notice in the Gazette, provided such activity is performed in accordance with such conditions as the Authority 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) | [Subparagraph (ee) deleted by section 1(r) of Act No. 20 of 2007]; |
| (ff) | the effecting, subject to the provisions of any other Act of Parliament and to such conditions, if any, as the Authority may from the [sic] 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 landing 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 |
[Subparagraph (ff) substituted by section 1(d)(ii) of Act No. 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 mandatory) that— |
| (i) | is a natural or juristic person registered in terms of, by or under such other Act of Parliament; and |
| (ii) | has been designated by the Authority 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 Authority 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 the other mandators. |
[Subparagraph (gg) inserted by section 1(d)(iii) of Act No. 55 of 1996]
"this Act"
includes the regulations;
means—
| (a) | those instruments or shares that are subordinated to depositors and general creditors and which instruments or shares— |
| (i) | do not constitute common equity tier 1 or additional tier 1 capital; and |
| (ii) | comply with such further conditions as may be prescribed; |
| (b) | a prescribed percentage of capital obtained through the issue, with the prior written approval of the Authority and in accordance with conditions approved by the Authority in writing, and such further conditions, if any, as may be prescribed, of ordinary shares, preference shares or other capital instrument issued in pursuance of the capitalisation of reserves resulting from a revaluation of assets; |
| (c) | such component of, percentage of or component and percentage of minority interest in specified issued instruments or shares, and arising from the consolidation of accounts and calculated in such a manner as may be prescribed; |
| (d) | capital obtained through the issue of instruments or shares constituting common equity tier 1 capital or additional tier 1 capital where the relevant proceeds of such instruments or shares, or any portion thereof, are excluded from qualifying common equity tier 1 capital or additional tier 1 capital as a result of a prescribed limit; |
[Definition inserted by section 1(s) of Act No. 22 of 2013]
"tier 2 unimpaired reserve funds"
means—
| (a) | any premium arising from the issue of instruments or shares that constitute tier 2 capital; |
| (b) | a prescribed percentage of general provision, general loan loss reserve or other reserve held against unidentified and unforeseen losses that comply with such conditions as may be prescribed; |
[Definition inserted by section 1(s) of Act No. 22 of 2013]
"Tribunal"
means the Financial Services Tribunal established in terms of section 219 of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(i) in Schedule 4, of Act No. 9 of 2017]]
"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 Authority 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; |
[Section 1(1A)(a)(i) substituted by section 1(k) of Act No. 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 |
[Section 1(1A)(a)(ii) substituted by section 1(k) of Act No. 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 Authority 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 Authority 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, 1973 (Act No. 61 of 1973), as the effective cause of a particular company having been unable to pay its debts; |
[Section 1(1A)(b)(iii) substituted by section 1(t) of Act No. 22 of 2013]
| (iv) | had taken part in any business practices that, in the opinion of the Authority, were deceitful, prejudicial or otherwise improper (whether unlawful or not) or which otherwise brought discredit on that person’s methods of conducting business; or |
[Section 1(1A)(b)(iv) substituted by section 1(l) of Act No. 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; |
[Section 1(1A)(b)(v) substituted by section 1(l) of Act No. 19 of 2003]
| (c) | The Authority 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 Authority with such information as may be necessary to enable, the Authority to form an opinion, as contemplated in this subsection, regarding the qualities of that person. |
[Section 1(1A)(c) substituted by section 1(m) of Act No. 19 of 2003]
| (d) | Any person who refuses or fails to comply with a request addressed to that person by the Authority under paragraph (c) shall be guilty of an offence. |
[Section 1(1A)(d) substituted by section 1(n) of Act No. 19 of 2003]
[Section 1(1A) inserted by section 1(h) of Act No. 9 of 1993]
| (2) |
| (a) | The Minister may, on the recommendation of the Authority 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. |
[Section 1(2)(a) substituted by section 1(i) of Act No. 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. |
| (3) | Unless the context otherwise indicates, words and expressions not defined in subsection (1) have the same meaning ascribed to them in terms of the Financial Sector Regulation Act. |
[Section 1(3) inserted by section 290, item 1(j) of Notice No. 853 of 2017]