| (1) | In order to qualify for registration, or to continue to be registered, a co-operative financial institution must demonstrate, to the satisfaction of Authority, or to the Agency if this function has been assigned or delegated to the Agency, on an ongoing basis that— |
| (a) | it has the requisite experience, knowledge, qualifications and competence to give effect to its obligations; |
| (b) | it has sufficient human, financial, and operational capacity to function efficiently and competently; |
| (c) | it meets any prescribed threshold requirements in respect of membership, membership shares and deposits held; and |
| (d) | it meets any other applicable prescribed requirements. |
| (b) | If the responsibility for the registration of a co-operative financial institution has been assigned or delegated to the Agency, the Agency must recommend to the Authority whether the application for registration as a co-operative bank should be approved or declined. |
| (c) | In the event that the application by a co-operative financial institution to register as a co-operative bank is declined— |
| (i) | the Authority may determine that the co-operative financial institution concerned may not hold members’ deposits exceeding a specified amount; and |
| (ii) | the co-operative financial institution concerned must re-apply for registration as a co-operative bank once the requirements to register as a cooperative bank have been met. |
| (d) | An amount determined by the Authority in terms of paragraph (c)(i)— |
| (i) | must be based on the nature and size of the co-operative financial institution; and |
| (ii) | may not exceed the general maximum limit for holdings of deposits by any co-operative financial institution prescribed by the Authority. |
| (e) | An application by a co-operative financial institution for registration as a co-operative bank must be accompanied by a letter of recommendation from the Agency, if applicable. |
| (3) | On the date that this section comes into operation, a co-operative financial institution that qualifies to be registered in terms of this Act— |
| (a) | must apply for registration in terms of this Act within 12 months from the date on which this section comes into operation; and |
| (b) | that holds members’ deposits exceeding a prescribed threshold, but which does not qualify to be registered as a co-operative bank, must not hold members’ deposits exceeding an amount determined by the Authority, based on the nature and size of the co-operative financial institution. |
| (4) | If the registration of co-operative financial institutions has been assigned or delegated to the Agency in terms of the Act, the Agency must inform the Authority of the registration of a cooperative financial institution within 14 days of the registration. |
[Section 40B inserted by section 290, item 7 in Schedule 4, of Act No. 9 of 2017 - effective 1 October 2018 (paragraph (h) of Notice 169 of 2018)]
