[Section 60 heading substituted by section 15(a) of Act No. 20 of 2007]
| (1) | Without derogating from the application of sections 77 and 78 of the Companies Act, 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. |
[Section 60(1) substituted by section 29(a) of Act No. 22 of 2013]
| (1A) | Without derogating from the application of sections 77 and 78 of the Companies Act, each director, chief executive officer and executive officer of a bank owes a duty towards the bank to— |
[Words preceding section 60(1A)(a) substituted by section 29(b) of Act No. 22 of 2013]
| (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 as the director, chief executive officer or executive officer in question may have. |
[Section 60(1A) inserted by section 40(b) of Act No. 19 of 2003]
| (a) | The Authority may institute action in terms of section 77 of the Companies Act or section 424 of the Companies Act, 1973 (Act No. 61 of 1973), against any director, chief executive officer or executive of the a Bank who was knowingly a party to the carrying out of the business of the bank in the manner envisaged in that section. |
[Section 60(1B)(a) substituted by section 29(c) of Act No. 22 of 2013]
| (b) | Notwithstanding anything to the contrary in any law, any amount recovered as a result of proceedings instituted by the Authority as envisaged in paragraph (a), shall be utilized— |
| (i) | first to reimburse all expenses reasonably incurred by the Authority in bringing such proceedings; |
| (ii) | thereafter to set off against any amount— |
| (aa) | paid by the Corporation for Deposit Insurance established in terms of section 166AE of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), to or in respect of depositors of the bank; |
| (bb) | paid to depositors by a financial sector regulator as defined in section 1(1) of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) 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; |
[Section 60(1B)(b)(ii) substituted by section 8 of the Financial Sector Laws Amendment Act, 2021 (Act No. 23 of 2021), Notice No. 789, GG45825, dated 28 January 2022- effective 1 June 2023 per (b)(i) of Commencement Notice No. 3202, GG48294, dated 24 March 2023]
| (iii) | thereafter for the pro rata repayment of the losses of depositors. |
| (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). |
[Section 60(2) substituted by section 40(c) of Act No. 19 of 2003]
| (3) | Notwithstanding anything to the contrary in any law or the common law or in any agreement contained, not more than 40 per cent, rounded off to the nearest 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; |
[Section 60(3)(a) substituted by section 39(a) of Act No. 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). |
| (a) | Every bank shall give the Authority written notice of the nomination of any person for appointment as a chief executive officer, director or executive officer by furnishing the Authority with the prescribed information in respect of the nominee: Provided that the Authority may return the written notice to the bank concerned on the grounds that it is incomplete or that it contains an error, in which case the requirement for the Authority to object to the appointment with a period of 20 working days is stayed. |
[Proviso to section 60(5)(a) inserted by section 29(d) of Act No. 22 of 2013]
| (b) | The notice shall reach the Authority at least 30 days prior to the proposed date of appointment. |
| (c) | The Authority 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 working days of receipt of the notice referred to in paragraph (b). |
| (d) | If the Authority objects to the proposed appointment as envisaged in paragraph (c), 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 Authority's objection, in which case the provisions of subsection (6)(d) to (k), shall apply mutatis mutandis. |
| (e) | For the purpose of this subsection the term "every bank" shall mean the chief executive officer of such bank, or in the case where it concerns the appointment of the chief executive officer, such member of the board of directors of such bank as may be designated by the board of directors of such bank. |
[Section 60(5) substituted by section 15(b) of Act No. 20 of 2007]
| (a) | Without derogating from any law, the Authority may object to the appointment or continued employment of a chief executive officer, director or executive officer of a bank if the Authority reasonably believes that the chief executive officer, 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, director or executive officer holds or continues to hold such appointment. |
| (b) | If the Authority wishes to terminate the appointment or the continued employment of a chief executive officer, director or executive officer of a bank, the Authority shall notify the following affected parties in writing of his or her intention and of the grounds for the proposed termination— |
| (i) | The chief executive officer, 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 Authority 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 Authority 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 Authority in response to that notice. |
| (d) | Any notified party shall be entitled, but not obliged, to make written representations to the Authority’s written notice within 14 working days of receipt of the Authority’s notice, or within such longer period as the Authority may, upon written application by the affected party concerned, allow. |
| (e) | The Authority 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, director or executive officer concerned should be terminated for the reasons contemplated in paragraph (a); and |
| (iii) | give notice to the affected parties of his or her decision in writing. |
| (f) | If, after having considered any written representation in respect of the chief executive officer, director or executive officer concerned, the Authority remains of the view that such officer’s appointment should be terminated, or if no written representation is submitted to the Authority within the period allowed under paragraph (d), the Authority shall refer the matter to the Arbitration Foundation of South Africa or its successor-in-law, or any other body designated by the Authority by means of a notice in the Gazette (hereinafter referred to as the "Arbitrator") for arbitration. |
| (g) | The Authority shall make the request for arbitration referred to in paragraph (f)— |
| (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 Authority 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 Authority, of the appointment of the chief executive officer, 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 Authority and the chief executive officer, director or executive officer concerned, whereupon the termination shall immediately take effect. |
| (j) | If under paragraph (h) the Arbitrator determines that adequate reasons do not exist for the termination, the Arbitrator shall reject the termination by written notice to the Authority and to the chief executive officer, 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 be final and binding and shall not be subject to review as envisaged in section 9. |
[Section 60(6) substituted by section 15(c) of Act No. 20 of 2007]
| (6A) | Subsections (5) and (6) apply with the changes required by the context to the appointment of a currently serving non-executive director as chairperson of the board of directors of a bank or controlling company. |
[Section 60(6A) inserted by section 15(d) of Act No. 20 of 2007]
| (7) | This section, where applicable, shall apply mutatis mutandis in respect of any branch or a controlling company. |
[Section 60(7) inserted by section 40(f) of Act No. 19 of 2003]
| (8) | A bank of a controlling company shall not appoint any person to a position of, or refer to any employee as, a director unless that person or employee has been appointed as a director of that bank or controlling company in terms of section 66 of the Companies Act. |
[Section 60(8) inserted by section 29(e) of Act No. 22 of 2013, with effect from 10 December 2014]
