Regulatory Alerts2014-08-19
Designation of Common Bond Group Activities Outside the Definition of Banking Business
The Registrar of Banks, with the Minister of Finance's approval, designates specific financial activities conducted by co-operative financial institutions and other savings groups with a common bond as outside the statutory definition of "the business of a bank" under the Banks Act, 1990. The notice defines permissible services for these entities, including soliciting member funds, granting loans, and pooling capital for objectives such as housing, education, and social welfare, while explicitly prohibiting operations that qualify as pension fund activities. Regulated entities must comply with the Co-operatives Act, adhere to aggregate contribution limits of R30 million (extendable to R40 million with CBDA approval), maintain proper accounting records, and submit audited financial statements within prescribed deadlines.