The Financial Sector Regulation Act (FSRA) 2017 amends the Co-operatives Banks Act 2007 to include the supervision and regulation of Co-operative Financial Institutions (CFI) within the Prudential Authority (PA). In terms of the commencement notice, the consequential amendments to the Co-operative Banks Act will come into effect on 1 April 2018, save for Chapter VIIA which will take effect on 1 October 2018. Chapter VIIA provides for the registration of CFIs, requirements for registration, suspension of registration or de-registration, repayment of deposits on deregistration or lapsing of registration and winding up or judicial management of CFIs.
The Co-operative Banks Act as amended by the FSRA provides that a “co-operative financial institution” means a co-operative that takes deposits and chooses to identify itself by use of the name Financial Co-operative, Financial Services Co-operative, Credit Union or Savings and Credit Co-operative.
A “Co-operative bank” means a co-operative or a co-operative financial institution registered as a co-operative bank in terms of this Act whose members:
(a) are employed by a common employer or who are employed within the same business district; or
(b) have common membership in an association or organisation, including a religious, social, co-operative, labour or educational group; or
(c) reside within the same defined community or geographical area.
On the date that Chapter VIIA takes affect, CFIs must apply to the Prudential Authority for registration. CFIs currently registered with the CBDA will have a period of 12 months to register as a CFI in terms of the Co-operatives Banks Act or prior to the expiration of the certificate they currently hold..
Presentation as provided to the CFI consultative workshop 6 August 2018.