This Office has taken note of recent publications in the media with regard to New Republic Bank Limited ("NRB"). In the interest of clarity and stability in the banking sector, it is regarded as necessary to issue the following comments:(1) The Office for Banks ("the OFB"), headed by the Registrar of Banks ("the Registrar"), forms a Department within the South African Reserve Bank ("the SARB") and in terms of the Banks Act, 1990 (Act No. 94 of 1990 - "the Banks Act"), is charged with the supervision of banks and mutual banks. The OFB has neither the ability nor the authority to provide banks or mutual banks with any form of financial assistance. (2) The mission of the OFB is to promote the soundness of banks through the effective application of international regulatory and supervisory standards. The supervisory function of the OFB should not be confused with the primary role of the SARB as the central bank of the Republic of South Africa. (3) The SARB functions in terms of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989 - "the SARB Act") and regards the protection of the domestic and external value of the rand as its primary goal in the South African economic system. In addition to the broad directive of the obligation to protect the value of the currency, the SARB Act confers on the SARB many other special responsibilities, amongst others, to permit the SARB to provide financial assistance to banks. Accordingly, the established policy of the SARB is to limit special financial assistance to solvent banks with serious short-term and reversible liquidity needs against the provision of acceptable collateral.(4) In the aforementioned regard, the Governor of the SARB, on 19 January 1999, confirmed that the SARB - 4.1 did not provide any financial aid to NRB;4.2 apart from the assistance provided to depositors of Islamic Bank Limited (in liquidation) announced by the SARB on 21 November 1997, the SARB did not provide any special financial assistance to any banking institution during the past year. (5) The minimum capital-to-asset ratio that a bank is required to keep in terms of the Banks Act is set at 8 per cent. In terms of the Banks Act, the Register is, however, authorised to condone a bank's non-compliance with the required minimum of 8 per cent.(6) For purposes of calculating the capital adequacy of a bank, the OFB relies on various returns submitted to it by banks in terms of the Banks Act. These returns are certified as correct by the chief executive officer and the chief accounting officer of each bank.(7) The above-mentioned returns are also subject to review, on an annual basis, by the the external auditors of each bank.(8) In the case of NRB, the capital-adequacy ratio for the past year, calculated as prescribed by the Banks Act and based on the figures rendered in the returns submitted to OFB by NRB, has been well in excess of the minimum of 8 per cent (19,8 per cent as at 30 September 1998). Consequently, a need for the Registrar to condone any supposed shortfall in capital of NRB never arose.(9) The purported 4,4 per cent-capital-to asset ratio mentioned in reports is evidently based on a report prepared by the chartered accountants KPMG. The OFB has not had sight of such a report and does not know how the purported capital-to-asset ratio of NRB was determined.  ​