Banks Act
Banks Act
Regulates the business of public companies taking deposits from the public, prescribing registration, capital adequacy, governance, and prudential standards for banks operating in South Africa.
Sections
2
Duties
2
Questions
6
Assessment from
R 85 000
What it covers
The Banks Act 94 of 1990 is the primary statute governing the registration, regulation, and prudential supervision of banks in South Africa. It prohibits any company from conducting 'the business of a bank' — broadly, taking deposits from the general public as a regular feature of business and using those deposits to fund credit or investment activities — without registration as a bank with the Prudential Authority (PA), which sits within the South African Reserve Bank following the Twin Peaks reforms (FSR Act 2017). The Act and its accompanying Regulations relating to Banks prescribe minimum capital requirements aligned to the Basel III international framework, including Common Equity Tier 1, Tier 1, and Total Capital Adequacy Ratios, a Leverage Ratio, and Liquidity Coverage and Net Stable Funding Ratios. Section 60 and the accompanying Regulations require banks to maintain these ratios continuously and report them to the PA on a prescribed schedule. Section 73 and King IV-aligned governance expectations require banks to maintain robust board governance, including board composition, independence, risk committees, and a documented risk appetite framework approved at board level. The Banks Act also governs large exposure limits, related party transactions, the appointment and approval of directors and executive officers (fit and proper requirements administered by the PA), and gives the PA wide powers of inspection, directive issuance, and ultimately curatorship or liquidation of a non-compliant bank. Banks are amongst the most intensively regulated entities in South Africa, with overlapping obligations under FICA, the National Payment System Act, and Companies Act governance requirements.
Does this apply to you?
It applies if
- Your organisation takes deposits from the general public as a regular feature of its business
- Your organisation uses deposited funds to make loans, advances, or investments on its own account
- Your organisation holds itself out to the public as a bank, or uses restricted terms such as 'bank', 'banking', or related terms in its name or marketing without PA authorisation
- Your organisation is a branch of a foreign bank operating in South Africa, or a controlling company of a registered bank
Thresholds that change what's required
- There is no de minimis exemption — taking deposits from the public without registration is unlawful regardless of scale, though Mutual Banks Act and Cooperative Banks Act provide separate, lighter-touch regimes for smaller deposit-taking entities meeting specific criteria
- Different prudential requirements scale with the bank's size and systemic importance — Domestic Systemically Important Banks (D-SIBs) face additional capital buffers and supervisory intensity
Exemptions
- Entities registered under the Mutual Banks Act 124 of 1993 or the Cooperative Banks Act 40 of 2007 follow separate but related prudential regimes
- Certain specified deposit-taking arrangements explicitly excluded from the definition of 'the business of a bank' under Banks Act s1 (e.g. specific employee or close corporation lending arrangements meeting prescribed criteria)
What non-compliance costs
Maximum fine
R 10 000 000
Imprisonment
Up to 10 years for conducting the business of a bank without registration, or for furnishing false information to the Prudential Authority
Civil exposure
Depositors and creditors may have claims against the bank and, in cases of unregistered deposit-taking, potentially against individual directors personally; the PA can also order restitution to affected depositors
Reputational
PA enforcement actions, directives, and curatorship orders are highly publicised given systemic importance to financial stability; a bank placed under curatorship or facing licence withdrawal suffers immediate and severe loss of depositor and market confidence, often triggering deposit runs
What the assessment covers
The assessment works through 6 questions across 2 duties, scored out of 77. Each answer generates the specific actions needed to close or prove that duty — and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on Banks Act
Run the assessment, get your score, and get the exact list of what to fix — with the evidence trail an auditor will ask for.