The business of a bank, as defined in the Banks Act 94 of 1990 (Banks Act), includes the soliciting or advertising for, or the acceptance of, deposits from the general public. A deposit is defined as an amount of money paid by one person or institution to another, subject to an agreement in terms of which an equal amount or any part thereof will be repaid on demand, on a specified or unspecified date, or in circumstances agreed upon between the parties involved. In order to conduct the business of a bank in South Africa, an entity must be registered as a bank by the PA. It is an offence to conduct the business of a bank in the Republic without being licensed as a bank.

Banking in South Africa is regulated by wide-ranging primary and secondary or subordinate legislation. The primary pieces of legislation governing deposit-taking institutions are the Banks Act, the Financial Sector Regulation Act 9 of 2017, the Mutual Banks Act 124 of 1993, the Co-operative Banks Act 40 of 2007, and the Co-operatives Act 14 of 2005. Secondary legislation includes prudential and joint standards, regulations relating to banks, regulations relating to cooperative banks, regulations relating to mutual banks, and directives, circulars and guidance notes.

Exemptions to the Banks Act have been granted in respect of certain banks, stokvels, and specific savings and credit groups with a common bond. There are conditions attached to such exemptions.

The PA’s approach to the regulation and supervision of the domestic banking system is also informed by the following legislation:

• the South African Reserve Bank Act 90 of 1989;
• the Financial Intelligence Centre Act 38 of 2001;
• the Companies Act 71 of 2008;
• the Postbank Limited Act 9 of 2010; and
• the National Payment System Act 78 of 1998.

The Insurance Act was signed into law in January 2018 and came into effect on 1 July 2018. It adopts a principle- and risk-based framework and is supported by prudential standards that elaborate on the principles enshrined in the Act. The PA published 42 prudential standards, which came into effect on 1 July 2018, to cover the financial soundness, governance and operations of the five types of insurance entities operating in South Africa (i.e. the solo insurers, Lloyd’s South Africa, micro-insurers, branches of foreign reinsurers and insurance groups).

The PA augmented the implementation of the Insurance Act with various communiqués covering topics such as the conversion of registration, the designation of insurance groups, auditing and disclosure requirements and transitional reporting obligations in terms of Schedule 3 of the Insurance Act. A number of joint communications were also published by the PA and the Financial Sector Conduct Authority covering topics such as the status of the instruments issued under the Long-term Insurance Act 52 of 1998 and the Short-term Insurance Act 53 of 1998, and cell captive insurance arrangements.

A specific activity under this new regime is the conversion of insurance licences. The deadline for the conversion of insurance licences is 30 June 2020.