Banks Act, 1990 (Act No. 94 of 1990)RegulationsRegulations relating to BanksChapter II : Financial, Risk-based and other related Returns and Instructions, Directives and Interpretations relating to the completion thereof13. Set-off |
| (1) | When a client maintains both debit and credit balances with a bank, it may be permissible in certain circumstances to set such balances off against one another for the purposes of completing the prescribed forms, resulting in only net balances being reported. |
| (2) | Unless specifically otherwise provided in these Regulations, set-off shall be allowed only if all of the circumstances specified below apply. |
| (a) | A legal right to set-off shall exist, and the reporting bank shall in cases of legal uncertainty obtain a legal opinion to the effect that its right to apply set-off is legally well founded and would be enforceable in the liquidation or bankruptcy of the client or the bank. |
| (b) | The debit and credit balances shall relate to the same obligor. |
| (c) | Both the debit and credit balances shall be denominated in the same currency. |
| (d) | The debit and credit balances shall have identical maturities. |
| (e) | The reporting bank shall monitor and control the relevant debit and credit balances on a net basis in its risk management process and client database for the granting of facilities. |
| (3) | For the purposes of this regulation 13, obligor means any natural person or juristic person, and "person" shall not have the same meaning as a "person" defined in regulation 67. |