Financial Institutions Amendment Act, 1985
GOVERNMENT GAZETTE
OF THE REPUBLIC OF SOUTH AFRICA
~ .
REPUBLIEK VAN SUID-AFRIKA
STAATSKOERANT
Registered at the Post Office as a Newspaper As 'nNuusblad by die PoskantoorGeregistreer
VOL. 241
No.1633.
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CAPE TOWN, 31 JULY 1985
KAAPSTAD, 31 JULIE 1985 No. 9865
STATE PRESIDENT'S OFFICE · KANTOOR VAN DIE STAATSPRESIDENT
31 July 1985 No. 1633. 31 Julie 1985
It is hereby notified that the State President has assented to the following Act which is hereby published for general information:-
Hierby word bekend gemaak dat die Staatspresident sy goedkeuring geheg het aan die onderstaande Wet wat hierby ter algemene inligting gepubliseer word:-
;;;;;;;;;Jo.106of1985: Financial Institutions Amendment Act, No. l06van 1985: Wysigingswet op Finansiele Instel- 1985. lings,1985.
2 No.9865 GOVERNMENT. GAZETTE, 31 JULY 1985
Act No. 106, 1985 FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
GENERAL EXPLANATORY NOTE:
[ ] Words in bold type in square brackets indicate omissions from existing enactments.
Words underlined with solid line indicate insertions in existing enactments.
ACT To amend the Insurance Act, 1943, so as to further define "life
policy"; to further regulate the appointment and functions of auditors, local auditors and valuators of registered insurers and the appointment of advisory committees; to increase the amount to be deposited by underwriters at Lloyds in a cer- tain trust account; to make other provision regarding the payment of dividends by insurers to their shareholders; and to extend the power of the Minister of Finance to make regu- lations; to amend the Banks Act, 1965, so as to define or fur- ther define certain expressions and to delete certain defini- tions; to alter the classification of banking institutions for the purposes of registration; to provide further for the obtaining of control over banking institutions, and for the returns which a banking institution has to render to the Registrar of Banks; to further regulate the requirements in respect of the share capital and reserves, the· reserve balance ·with ·the South African Reserve Bank and the minimum liquid assets which a banking institution shall maintain; to confer certain powers on the Minister of Finance as to liquid assets that banks carrying on business outside the Republic shall maintain; to empower the said Registrar to issue certain directives ·in·re- lation to business carried on by banks outside the Republic; to delete the requirement that a banking institution shall maintain prescribed investments; to provide therefor that a banking institution shall obtain the approval of the said Registrar to open a branch office outside the Republic; to prohibit bank controlling companies from carrying on the business of a banking institution outside the Republic; to fur- ther regulate the voting power of a shareholder nomine officii,· to make new provision for the limitation of certain activities of banks; and to curtail the right to inspect certain re- turns of banking institutions; to amend the Building So· cieties Act, 1965, so as to further define certain expressions and to delete a certain definition; to extend the forms of se- curity in which building societies may invest; to further regu· late the minimum liquid assets which a building society shall maintain; to delete the requirement that a building society shall maintain certain prescribed investments; and to further regulate the period of repayment of loans against reducible mortgage; and to provide for matters connected therewith.
(English text signed by the State President.) (Assented to 10 July 1985.)
4 No.9865
Act No. 106, 1985
Amendment of section 1 of Act 27 of 1943, as amended by section2 of Act 73 of 1951, section 39 of Act 24 of !956, section 50 of Act 25 of !956, section I of Act 79 of 1959, section I of Act 10 of 1965, section 1 of Act41 of 1966, section I of Act 65 of 1968, section I of Act 39 of 1969, section 1 of Act 91 of 1972, section I of Act 101 of 1976, section I of Act 94 of 1977, section 1 of Act 80 of 1978, section I of Act 103 of 1979, section.! of Act 99 of 1980, section 1 of Act 36 of 1981 and section 1 of Act 86 of 1984.
Amendment of section 2A of Act 27 of 1943, as inserted by section2 of Act 94 of 1977.
Amendment of section2B of Act 27 of 1943, as inserted by section 2 of Act 99 of 1980.
Amendment of section 9 of Act 27 of 1943, as amended by section 7 of Act 73 of!951, section 8 of Act 79 of 1959, section 7 of Act 10 of 1965 and section 5 of Act39of1969.
GOVERNMENT GAZETTE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
BE IT ENACTED by the State President and the Parliament of the Republic of South Africa, as follows:-
1. Section 1 of the Insurance Act, 1943, is hereby amended by the insertion in subsection (1) after paragraph (bb) in the defim· tion of "life policy" of the following paragraph: 5
"(cc) any contract in terms of which a registered insurer who is authorized to carry on life business, underwrites an obligation which a pension fund, a retirement annuity fund, a provident fund or a benefit fund (but not a medical aid scheme registered under the provisions o 10 the Medical Schemes Act, 1967 (Act No. 72 of 1967),) as defined in the Income Tax Act, 1962 (Act No. 58 o 1962), or a Friendly Society as defined in the Friendly Societies Act, 1956 (Act No. 25 of 1956), owes to its members;". 15
· 2. Section 2A of the Insurance Act, 1943, is hereby amended by the substitution for paragraph (a) of subsection (1) of the fol- lowing paragraph:
"(a) The Minister [shall] may appoint an advisory commit- tee .on matters relating to long-term insurance, consist- 20 ing of the registrar as chairman and such other mem- bers as the Minister may from time to time determine.".
3. Section 2B of the Insurance Act, 1943, is hereby amended by the substitution for paragraph (a) of subsection (1) of the fol- 25 lowing paragraph:
"(a) The Minister [shall] may appoint an advisory commit- tee on matters relating to short-term insurance, consist- ing of the registrar as chairman and such other mem- bers as the Minister · may from time to · time 30 determine.".
4. Section 9 of theinsurance Act, 1943, is hereby amended- ( a) by the deletion in subsection (1) ofthe second proviso; (b) by the substitution in subsection (2) for the word "pro-
visos" ofthe word "proviso"; 35 (c) by the insertion after subsection (2) of the following
subsection: " 2A Whenever the a ointment of an auditor or
local auditor is terminated, otherwise than contem- plated in subsection (2), that auditor or local auditor 40 shall forthwith submit a report to the registrar in which the following is stated: (a) Whether to his knowledge an irregularity in the
conduct of the affairs of the insurer which has caused or is likely to cause financial loss to the in- 45 surer is contemplated, has taken place or is taking place;
6 No.9865
Act No. 106, 1985
Amendment of section 10 of Act 27 of 1943, as amended by section 8 of Act 73 of 1951, section 9 of Act 79 of 1959 and section 6 of Act 39 of 1969.
Amendment of section 23B of Act27 of 1943, as inserted by section 9 of Act 103 of 1979 and amended by section 8 of Act 99 of 1980.
Amendment of section 60 of Act 27 of 1943, as substituted by section 8of Act41of1966 and amended by section2of Act 65 of 1968 and section 7 of Act 86 of 1984.
GOVERNMENT GAZETI'E, 31 JULY 1985
FINANCIALINSTITUTIONS AMENDMENT ACT, 1985
(b) particulars of the irregularity; and I (c) the reason, if known, or the presumable reason
for the termination of his appointment.''; and (d) by the insertion after subsection ( 4) of the following
subsection: 5 "( 4A) No person shall hinder or obstruct an auditor
or local auditor in the performance of his duties or the exercise of his powers under this Act.".
5. Section 10 of the Insurance Act, 1943, is hereby amended- (a) by the substitution for subsection (2) of the following 10
subsection: "(2) The [provisos] proviso to section 9 (1) and the
provisions ofsection 9 (1)bis, [and] (2) and (2A) shall apply mutatis mutandis in connection with the valuator of a registered insurer."; 15
(b) by the insertion after subsection (4) of the following subsection:
"( 4A) No person shall hinder or obstruct a valuator in the performance of his duties or the exercise of his Sowers under this Act."; and 20
(c) y the insertion after subsection (6) of the following subsection:
"{6A) A valuator shall not attest without qualifica- tion a statement referred to in subsection (6), unless he has satisfied himself as provided in that subsection.". 25
6. Section 23B of the Insurance Act, 1943, is hereby amended-
( a) by the substitution for paragraph (b) of subsection (1) of the following paragraph:
''(b) if such declaration applies to an insurer who is 30 registered under this Act to carry on funeral, in- dustrial, life or home service business or to a per- son who renders services towards· effecting, main- taining or servicing funeral, industrial, life or home service policies underwritten by a registered in- 35 surer, the registrar has consulted the advisory com- mittee, if any, appointed in terms of section 2A, about it; and"; and
(b) by the substitution for paragraph (c) of subsection (1) of the following paragraph: 40
"(c) if such declaration applies to an insurer who is registered under this Act to carry on fire, guaran- tee, marine, miscellaneous, motor or personal ac- cident business or to a person who renders service towards effecting, maintaining or servicing fire, 45 guarantee, marine, miscellaneous, motor or per- sonal accident policies underwritten by a registered insurer, the registrar has consulted the advisory committee, if anr, appointed in terms of section 2B, about it.". 50
7. Section 60 of the Insurance Act, 1943, is hereby amended by the substitution for subparagraph (i) of paragraph (j) of subsec- tion (1) of the following subparagraph: ·
"(i) Underwriters at Lloyds, acting through the person re- ferred to in paragraph (g), shall deposit in the trust ac- 55 count aforesaid an amount equivalent to [seventy] one hundred and thirty per cent, or such percentage as the Minister may from time to time determine, of all pre- miums and additional premiums less return premiums,
8 No.9865
Act No. 106, 1985
Amendment of section 73ter of Act 27 of 1943, as inserted by section 21 of Act 79 of 1959 and substituted by section 10 of Act 86 of 1984.
Amendment of section 76 of Act 27 of 1943, as substituted by section 9 of Act41 of 1966 and amended by section 13 of Act 101 of 1976 and section 11 of Act 86 of 1984.
Amendment of section 1 of Act 23 of 1965, as amended by section 12 of Act 91 of 1972, section 37 of Act 101 of 1976, section 18 of Act 80 of 1978, section 27 of Act 103 of 1979, section 45 of Act 99 of 1980, section 16 of Act 82 of 1982, section 20 of Act 46 of 1984 and section 22 of Act 86 of 1984.
GOVERNMENTGAZETIE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACf, 1985
less payments in terms of paragraph (f). and less all commissions relating to policies and endorsements in respect of such insurance business as aforesaid, receiv- ed through persons carrying on such business and taken down at Lloyds policy signing office subsequent to the 5 thirtieth day of June, 1966. ".
8. Section 73ter of the Insurance Act, 1943, is hereby amended by the substitution for subsection (2) of the following subsection:
"(2) An insurer [referred to in subsection (1)] ~ 10 (a) fails to comply with any provision of section 17 (1), 17 ·
(4}, 18 (1) or 18 (4) and who pays out (any] dividends to shareholders during the existence of a deficiency (so referred to] in the assets reguired in terms of the said sections; or 15
(b) pays out dividends to shareholders when such payment causes a deficiency referred to in paragraph (a),
shall be guilty of an offence." .
9. Section 76 of the Insurance Act, 1943, is hereby amended by the insertion in subsection (1) after paragraph (bA)of the fol- 20 lowing paragraph:
"(bB) prescribing periods within which policies and amended· policies are to be issued.". '
10. Section 1 of the Banks Act, 1965, is hereby amended- ( a) by the insertion in subsection (1) after the definition of 25
"associate" ofthe following definition: "'bank' means a person, other than a discount house,
who carries on the business of a banking institution as described in subsection (2);";
(b) by the insertion in that subsection after the definition of 30 "bank controlling company" of the following defini- tion: "'banking group' means two or more banks one of
which controls the other or all of which are con- trolled by the same bank controlling company;"; 35
(c) by the substitution in that subsection for the definition of '"banking institution' or 'institution'" of the follow- ing definition: "'banking institution' or 'institution' means a bank or a
discount house;"; 40 (d) by the deletion in that subsection of paragraph (d) of
the definition of "liquid assets", (e) by the insertion in that subsection in the definition of
" liquid assets" of the following paragraph after para- graph (g): 45
"(. A) bills issued b the Land Bank for u oses of ex- tending short-term financing to an agricultural co- operative or a special farmers' co-operative formed and incorporated under the Co-operatives Act, 1981 (Act No. 91 of 1981), or which is deemed to be 50 so formed and incorporated under that Act, for the purchase of agricultural products from farmers
10 No. 9865
Act No. 106, 1985
GOVERNMENTGAZETIE, 31JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACf, 1985
and of agricultural implements, equipment andl other means of production for resale to farmers for the production of agricultura~ products;";
(f) by the substitution in that subsection for paragraph (h) of the definition of "liquid assets" of the following 5 paragraph:
"(h) for a period of not more than three years from the · · ··date of commencement of section 10 of the Finan-
cial Institutions Amendment Act, 1985, other bills issued by the Land Bank and advances to the said 10 bank which, at the option of the lender, are con- vertible into bills, u to the res ective amounts representing the percentages, determined from time to time by the Minister by notice in the Ga- zette, of the amount of such bills held by the bank- 15 ing institution on the said date of commencement and of the amount oWing to the banking institution on that date in respect of such advances, respective- ly;";
(g) by the substitution in that subsection for paragraph (i) 20 of the definition of "liquid assets" of the following paragraph:
"(i) debentures of the Land Bank held by the banking institution on the date of commencement of sec- tion 10 of the Financial Institutions Amendment 25 Act, 1985, and which on that date had [with] a ma- turity of not more than three years;";
(h) by the substitution in that subsection for paragraph (j) of the definition of "liquid assets" of the following paragraph: 30
"(j) debentures or notes issued by the Industrial Devel- opment Corporation of South Africa, Limited, in connection with a scheme for financing the export of capital goods, held by the banking institution on the date of commencement of section 10 of the Fi- 35 nancial Institutions Amendment Act, 1985, and which [have] on that date had a maturity of not more than three years;";
(i) by the substitution in that subsection for paragraph (n) of the definition of "liquid assets" of the following 40 paragraph:
"(n) promissory notes issued by a foreign borrower in favour of a banking institution registered in terms of this Act or the Industrial Development Corpor- ation of South Africa, Limited, constituted under 45 the Industrial Development Act, 1940 (Act No. 22 of 1940), or bills drawn on a foreign borrower and accepted by him, in terms of any loan agreement concluded between the foreign borrower and such a banking institution for the financing of the export 50 of capital goods or the financing of services and re- insured in terms of the Export Credit Re-insurance Act, 1957 (Act No. 78 of 1957), if such promissory notes or bills comply with any further require- ments under the regqlations and were held by the 55 banking institution on the . date of commencement of section 10 of the Financial Institutions Amend- ment Act, 1985;";
(j) by the substitution in that subsection for the word "thirty-first", wherever it appears in the definition of 60 "medium-term liability", of the word "thirty-second";
(k) by the substitution in that subsection for the word "thirtieth", wherever it appears in the definition of "short-term liability", of the word "thirty-first" ;
12 No. 9865
Act No. 106, 1985
·Amendment of section 2 of Act 23 of 1965, as amended by section 38 of Act 101 of 1976 and section 20 of Act 46 of 1984.
Amendment of section 4 of Act 23 of 1965, as amended by section 23 of Act 86 of 1984.
GOVERNMENTGAZETI'E,31JULY1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
(l) by the deletion in that subsection of the definitions of "commercial bank", "general bank", "merchant bank" and "prescribed investments";
(m) by the deletion in subsection (2) of the word "or" at the end of paragraph (a); 5
(n) by the addition in that subsection of the word "or" at the end of paragraph (b);
( o) by the addition to that subsection of the following para- graph:
"(c) carries on the business contemplated in the defini- 10 tion of "discount house" in subsection (1)"; and
(p) by the substitution for paragraph (e) of subsection (5) of the following paragraph:
"(e) the amount b which the amount of the aid-u capital and unimpaired reserve funds required in 15 terms of section 14 (3) exceeds the paid-up share capital and unimpaired reserve funds of a subsi- diary referred to in section 13 (2) (b).".
11. Section 2 of the Banks Act, 1965, is hereby amended- ( a) by the substitution for subsection (1) of the following 20
subsection: "(1) This Act shall not apply to the Post Office Sav-
ings Bank or the Land Bank or the Reserve Bank Q! the Corporation for Public Deposits or the Industrial Development Corporation of South Africa, Limited, or 25 the Public [Debt] Investment Commissioners or to any local authority or any building society or any Black co- operative credit society registered under any proclama- tion issued under Act No. 29 of 1897 of the Cape of Good Hope or under the Black Adminisration Act, 30 1927 (Act No. 38 of 1927), or an institution having as its main objective the financing of the development of certain regions and which has been approved by the Minister and complies with conditions which the Minis- ter may from time to time deem necessary and of which 35 the institution has been notified in writing: Provided that such exemption shall not apply to any savings de- partment or savings bank or similar deposit-receiving institution established by or in connection with any local authority."; and 40
(b) by the deletion of subsection (2).
12. Section 4 of the Banks Act, 1965, is hereby amended- ( a) by the substitution for subsection (1) of the following
subsection: "(1) Any person who intends to carry on the business 45
of [any class of] ]; banking institution in the Republic, may apply to the Registrar for permission to establish [such a banking institution) a bank or discount house, and the Registrar shall grant such permission if the ap- plicant satisfies him that the establishment of such insti- 50 tution will be in the public interest and, where the pro- posed business is that of a discount house, furnishes proof to him that the Reserve Bank will be prepared to recognize the applicant as a discount house.";
(b) by the substitution for subsection (2) of the following 55 subsection:
"(2) An applicant to whom the Registrar has granted permission in terms of subsection (1) may, within the period fixed by the Registrar, apply to him in the form prescribed by regulation to be registered provisionally 60 under this Act as a [banking institution of the class in question] bank or a discount house, as the case may be, and shall submit in duplicate with its application- (a) its memorandum and articles of association; (b) a statement of the address of its head office; 65
14 No.9865
Act No. 106, 1985
Amendment of section 7 of Act23 of 1965, as amended by section 39 of Act 101 of 1976.
GOVERNMENTGAZETIE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACf, 1985
(c) a statement of the name and address of its chair- man and of every director and of its chief execu- tive officer; and
(d) full particulars of the business it proposes to carry on and of the manner in which it proposes to carry 5 on such business.";
(c) by the substitution for subsection (4) of the following subsection:
"( 4) If the Registrar is satisfied- (a) that the business proposed to be carried on is that 10
of a banking institution of the class in respect of which registration is desired;
(b) that the memorandum and articles of association of the applicant are not inconsistent with this Act and are not undesirable for any reason; and 15
(c) that the applicant does not propo·se to adopt unde- sirable methods of conducting business,
he shall, subject to the provisions of subsections (6) and (7) , and after payment by the applicant of the registra- tion fee prescribed by regulation, register the applicant 20 provisionally as a [banking institution of the said class] bank or a discount house, as the case may be.";
(d) by the insertion after subsection (4) of the following subsection:
" 4A A bank which at the commencement of sec- 25 tion 1 ~ o the mancial Institutions Amendment Act, 1985, is registered or provisionally registered as a merchant bank, general bank or commercial bank shall be deemed to be registered or provisionally registered under this section as a bank, but the provisions of this 30 subsection shall not affect any right or privilege which belonged to such a bank by virtue of the fact that it was registered as such a merchant bank, general bank or commercial bank.";
(e) by the substitution for subsection (6) of the following 35 subsection:
"(6) The Registrar shall not register an applicant provisionally unless the applicant is a public company incorporated and registered [or deemed to have been in- corporated and registered] under the Companies Act, 40 [1926 (Act No. 46 of 1926)] 1973 (Act No. 61 of 1973)."; .
(f) by the substitution for paragraph (d) of subsection (7) of the following paragraph:
"(d) the applicant proposes to carry on business in a lo- 45 cation as defined in the Blacks (Urban Areas) Consolidation Act, 1945 (Act No. 25 of 1945), and the Department of [Plural Relations and Develop- ment] Co-operation, Development and Educa~ has recommended that it be not provisionally 50 registered."; and
(g) by the substitution for subsection (9) of the following subsection:
"(9) If a provisionally registered institution becomes fully qualified for registration at any time while it is 55 provisionally registered, by reason of the fact that it has complied with any requirements imposed under subsec- tion (8), the Registrar shall, upon payment of the regis- tration fee prescribed by regulation, register such insti- tution as a [banking institution of the class to which it 60 belongs] bank or a discount house, as the case may .Q£,".
13. Section 7 of the Banks Act, 1965, is hereby amended by the substitution in subsection (1) for the words "banking institu- tion of a particular class" of the words "a bank or a discount 65 house".
16 No. 9865
Act No. 106, 1985
Amendment of section 10 of Act 23 of 1965, as amended by section 41 of Act 101 of 1976.
Substitution of section 11 of Act23 of 1965.
Substitution of section 12 of Act23of1965.
GOVERNMENTGAZETTE,31JULY1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
14. Section 10 of the Banks Act, 1965, is hereby ameQded- (a) by the substitution for subsection (3) of the following
subsection: "(3) (a) When a banking institution, in the opinion
of the Registrar, has ceased to carry on the busi- 5 ness of a banking institution of the class in which it is registered or provisionally registered, the Regis- trar shall by notice in writing call upon that institu- tion to show cause, within a period of not less than thirty days stated in the notice, why its registration 10 or provisional registration shall not be cancelled [or, in the case of an institution continuing to carry on banking business, shall not be converted into registration or provisional registration as a banking institution of the appropriate class]. 15
(b) If the institution does not, within the period men- tioned in paragraph (a), show cause to the satisfac- tion of the Registrar, he shall cancel the registra- tion of the institution [or, in the case of an institution continuing to carry on banking business, 20 convert its registration into registration of a bank- ing institution of the appropriate class].
(c) A cancellation [or conversion in terms of para- graph (b)] shall take effect one month after the date on which the Registrar has given written no- 25 tice thereof to the institution concerned, unless within that period the institution appeals to the Minister in terms of section three against the Registrar's decision, in which case the cancellation [or conversion] shall have no force or effect unless 30 and until it has been confirmed by the Minister.
(d) The Minister may after considering any appeal under paragraph (c) confirm the decision of the Registrar or set it aside and substitute any decision which in his opinion the Registrar ought to have 35 given, and any such decision shall be final and shall be carried out in· all respects as if it were the Regis- trar's decision.
[(e) When the registration or provisional registration of an institution has been converted into registration 40 or provisional registration in another class in terms of this subsection, the Registrar shall issue to the institution a certificate of such conversion]"; and
(b) by the deletion of subsection (4).
15. The following section is hereby substituted for section 11 45 of the Banks Act, 1965: "Voluntary cancellation of registra- tion.
11. Upon the application or with the consent in writing of a bankmg institution the Registrar may cancel its registration or provisional registration [or convert its registration or provisional registration] 50 under this Act [as a banking institution of a particu- lar class into a registration or provisional registration as a banking institution of any lither class, and when he has so converted a registration or provisional registration he shaD issue to the institution a certi- 55 ficate of the new or converted registration or provis- ional registration).".
16. The following section is hereby substituted for section 12 of the Banks Act, 1965:
''Publication of fact of registration and of name and class of banking institution.
12. (1) Upon the registration or provisional regis- 60 tration of any banking institution or upon the cancel- lation .2! suspension [or conversion] of any such registration or upon the expiry of a provisional registration or upon the change of the name of an institution, the Registrar shall cause to be published 65 a notice thereof in the Gazette.
18 No. 9865
Act No. 106, 1985
Amendment of section 12A of Act23 of 1965, as inserted by section 42 of Act 101 of 1976 and amended by section 28 of Act 103 of 1979 and section 25 of Act 86 of 1984.
Amendment of section 13 of Act 23 of1965, as amended by section 19 of Act 80 of 1978.
GOVERNMENTGAZE1TE,31JULY1985
FINANClAL INSTITUTIONS AMENDMENT ACf, 1985
(2) Every banking institution shall display- ( a) conspicuously and in easily legible letters at the
entrance to every place in the Republic where the banking institution carries on any business as such; 5
(b) in easily legible letters on every statement, no- tice, advertisement or letter published or issued to any member of the public in the Republic by or on behalf of the banking institution,
the name of the institution and a statement of the 10 fact that it is authorized to carry on the business of a banking institution of the class in which the institu- tion in question was registered or provisionally regis- tered.".
17. Section 12AoftheBanks Act, 1965, is hereby amended- 15 (a) by the substitution for subsection (1) of the following
subsection: "(1) No person shall without the prior written appro-
val of the registrar acquire control over a banking insti- tution, and [subject to the provisions of subsection (6), a 20 person, other than a registered banking institution, shall not acquire control over a banking institution unless he is registered as a bank controlling company] ~ Registrar shall not grant such approval- a in the case of a bank, to a erson other than a 25
registered bank or registered bank controlling company; and
(b) in the case of a discount house, to a person othe than a registered bank controlling company.";
(b) by the deletion of subsections (2), (3) and (4); 30 (c) by the substitution for subsection (5) of the following
subsection: · "(5) A person who intends to acquire control over a
banking institution must obtain the written approval of the Registrar, and unless such a person is a registered 35 bank controlling company or [banking institution or an institution mentioned in subsection (6)] bank he must also apply to the Registrar, in the manner prescribed by regulation, to be registered as a bank controlling company and submit with his application the informa- 40 tion and documents prescribed by regulation."; and
(d) by the deletion of subsection (6).
18. Section 13 of the Banks Act, 1965, is hereby amended- (a) by the deletion in paragraph (a) of subsection (1) of the
words "the prescribed investments"; . 45 (b) by the substitution, in the Afrikaans text, for paragraph
(b) of subsection (1) of the following paragraph: "(b) binne 'n tydperk van veertig dae vanaf die einde
van elke kalenderkwartaal, 'n staat in die vorm ~ [wat in 'n] by regulasie [voorgeskrewe bates, 50 soos deur hierdie Wet vereis, in] voorgeskryi en soos voormeld gesertifiseer [is], van sy bates en laste aan die einde van die laaste besigheidsdag in daardie kwartaal;";
(c) by the substitution for subsection (2) of the following 55 subsection:
"(2) The regulations referred to in paragraphs (a), (b) and (c) of subsection (1) may- {!!) prescribe different forms for the statements and re-
turns to be furnished by [various classes of institu- 60 tions] banks and discount houses;
20 No. 9865 •
Act No. 106, 1985
Amendment of section 14 of Act23 of 1965, as amended by section 3 of Act 23 of 1970, section 44 of Act 101 of 1976, section 29 of Act 103 of 1979, section 46 of Act 99 of 1980 and section 23 of Act 36 of 1981.
GOVERNMENTGAZETTE,31JULY1985
FINANCIAL INSTITUTIONS AMENDMENT ACf, 1985
rescribe that a bankin institution which carries on the business of a banking institution (as defined in section 1 (2)) by way of a subsidiary, branch office, agency or joint undertaking (unless it has an interest of less than thirty per cent) outside 5 the Republic, shall incorporate the information re- ferred to paragraphs (a), (b) and (c) of subsection (1) in respect of such business in the returns and statements which it has to furnish to the Registrar in accordance with those paragraphs and shall also 10 furnish such information separately to the Regis- trar in the prescribed form and certified as afore- said;
(c) prescribe that in the case of a banking group, the controlling company of such banking group shall, 15 in addition to the returns furnished by each bank in the group, furnish to the Registrar the informa- tion concerned in the prescribed form and certified in accordance with paragraph (a) of subsection (1 ), relating to all the banking institutions in the group, 20 including the business referred to in paragraph (b), if any, in consolidated form."; and
(d) by the deletion of subsections ( 4) and ( 5).
19. Section 14 ofthe Banks Act, 1965, is hereby amended- ( a) by the substitution for subsection (1) of the following 25
subsection- " ( 1) A [banking institution (other than a discount
house)] ~shall, subject to the provisions of subsec- tion (2), maintain in the Republic a paid-up share capi- tal and unimpaired reserve funds together amounting 30 to not less than- ( a) [two hundred thousand] one million rand; or (b) [six per cent of] an amount which represents the
average of the total amounts [of its liabilities to the public in the Republic excluding liabilities under 35 acceptances, plus four per cent of an amount which represents the average of the total amounts of such last-mentioned liabilities and the banking institu- tion's contingent liabilities under promissory notes, bills and any other similar instrument endorsed by 40 it] re resentin the ercenta es, determined b regulation, of the amounts of the different groups of assets, groups of contingent liabilities and other groups of risk exposures in the conduct of its busi- ness, as determined by regulation, and of the 45 amount of the repurchase agreements (excepting such agreements entered into with the Reserve Bank) at the end of each of [the months of] the last preceding three calendar [quarter] quarters, as shown in the [monthly] returns furnished to the 50 Registrar in terms of section 13 (1) [(a)] (c) in re- spect of such [months] calender quarters, -
whichever is the greater [: Provided that for the pur- poses of the application of this subsection-
(i) a banking institution may deduct from its 55 aforesaid liabilities, other than liabilities under acceptances, an amount equal to the amount of liquid assets it holds in excess of the amount required by this Act; and
(ii) a commercial bank may deduct from its afore- 60 said liabilities, other. than liabilities under ac- ceptances, in addition to the amount referred to in paragraph (i), an amount equal to fifty per cent of the remittances in transit].";
22 No.9865
Act No. 106, 1985
Substitution of section 15 of Act 23 ofl965, as amended by section 45 of Act 101 of 1976.
Amendment of section 16 of Act 23 of1965, as substituted by section 13 of Act 91 of 1972 and amended by section 47 of Act 99 of 1980.
GOVERNMENTGAZEITE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
(b) by the substitution for subsection (2) of the following subsection:
"(2) a Loan ca ita! obtained b wa of debentures issued for a minimum period of seven years, may rank as capital for the purposes of subsection (1), 5 if issued subject to- (i) the condition that the debentures may be re-
paid before maturity only at the option of the bank and with the prior written approval o the Registrar; 10
(ii) the condition that, notwithstanding the provis- ions of any other Act, in the event of the liquidation of the bank the capital amount o the debentures shall not be repaid until the claims of other creditors have been satisfied; 15 and
(iii) the further conditions which the Minister may determine by regulation.
(b) The total amount of debentures referred to in paragraph (a), issued and not repaid, shall at no 20 time exceed an amount equal to twenty per cent o the amount of share capital and reserve funds which the institution is required to maintain.";
(c) by Jhe insertion after subsection (2) of the following subsections: 25
"(3) The provisions of subsection (1) shall apply mu- · tatis mutan is to t e usmess o a su s1 tary mentioned in section 13 (2) (b).
(4) A bank which on the date of commencement o section 19 of the Financial Institutions Amendment 30 Act, 1985, does not comply with the provisions of sub- section (1), shall correct the deficiency within the period and in accordance with the conditions deter- mined by the Registrar."; and
(d) by the deletion of subsection (5). 35
20. The following section is hereby substituted for section 15 of the Banks Act, 1965: "Share capital requirement for discount houses.
15. A discount house shall maintain in the Repub- lic a paid-up share capital and unimpaired reserve funds together amounting to not less than- 40 (a) [two hundred thousand] one million rand; or (b) two per cent of the amount of its liabilities to the
public [in the Republic] and the total amount of its repurchase agreements (excepting such agree- ments entered into with the Reserve Bank) as 45 shown in the last preceding quarterly statement furnished by it to the Registrar in terms of para- graph (b) of subsection (1) of section thirteen,
whichever is the greater.".
21. Section 16 of the Banks Act, 1965, is hereby amended- 50 (a) by the substitution for subsection (1) of the following
subsection: "(1) A [banking institution (other than a disconnt
house)] hl!!!! shall maintain a reserve balance with the Reserve Bank [amounting] which, together with the 55 total amount of its Reserve Bank notes, subsidiary coin and gold coin, amounts to not less than the sum of- ( a) eight per cent of its short-term liabilities to the - public in the Republic, other than liabilities under
acceptances;and 60
24 No.9865
Act No. 106, 1985
Amendment of section 17 of Act 23 of 1965, as substituted by section 14 of Act 91 of 1972 and amended by section 46 of Act 101 of 1976, section 48 of Act 99 of 1980, section 24 of Act 36 of 1981 and section 20 of Act 46 of 1984.
GOVERNMENT GAZETTE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
(b) four per cent of its medium-term liabilities to the public in the Republic, other than liabilities under acceptances,
as shown in the last preceding monthly return furnished by it to the Registrar in terms of section 13 (1) (a)."; 5
(b) by the substitution for subsection (2) of the following subsection:
"(2) For the purposes of the provisions of subsection (1) the provisions of provisos (i), (ii), (iii) and [(v)] ~ [of] to section 17 (1) shall apply mutatis mutandis."; 10 and
(c) by the addition of the following subsection: " 3 (a) Whenever the Governor of the Reserve
Bank, with the consent of the Minister of Finance. deems it desirable in the national economic inter- 15 est, he may determine that the percentages men- tioned in paragraph (a) and (b) of subsection (1) shall be increased or decreased.
(b) Whenever the Governor of the Reserve Bank has made a determination under paragraph (a), he 20 shall inform the Registrar thereof in writing, and the Registrar shall as soon as practicable give writ- ten notice of the determination to every registered bank and cause the determination to be published by notice in the Gazette. 25
(c) Any such determination shall take effect on a date mentioned in the notice whereby the determina- tion in terms of paragraph (b) is promulgated in the Gazette.".
22. Section 17 of the Banks Act, 1965, is hereby amended- 30 (a) by the substitution for subsection (1) of the following
subsection: "(1) A [banking institution (other than a discount
house)] bank shall maintain in the Republic liquid as- sets amounting to not less than the aggregate of- 35
(a) [thirty] twenty per cent of its short-term liabilities to the piibiiC'ifl the Republic, other than liabilities under acceptances;
(b) [twenty] fifteen per cent of its medium-term liabili- ties to the public in the Republic, other than 40 liabilities under acceptances; !!!!!!
(c) five per cent of its long-term liabilities to the public in the Republic [; and
(d) five per cent of its liabilities under acceptances and of its contingent liabilities under promissory notes, 45 bills and any other similar instrument endorsed by it],
as shown in the last preceding monthly return furnished by it to the Registrar in terms of paragraph (a) of sub- section (1) of section thirteen: Provided that for the 50 purposes of this subsection-
(i) the credit balance which [in the case of a commer- cial bank (as defined in subsection (3) )] originates from a clearing house settlement or a similar settlement . between [commercial] banks shall be 55 deemed not to be a liability to the public and a debit balance of such bank which originates from a clearing house settlement or a similar transaction between [commercial] banks shall be deemed not to be a liquid asset; 60
(ii) a [commercial] bank may [effect the deduction re- ferred to in proviso (ii) to subsection (1) of section fourteen] ~ from the liabilities referred to in
26 No. 9865
Act No. 106, 1985
GOVERNMENT GAZETTE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
paragraph (a) hereof an amount egual to fifty per cent of the remittances in transit;
(iii) a [banking institution) bank may deduct from the liabilities referred to in paragraphs (a), (b) and (c) the amounts owing to it in respect of loans made 5 by it against security of [fixed) deposits included under the said paragraphs as well as the amounts owing to it by other banks and payable within the respective periods referred to in paragraphs (a) , (b) and (c); [and 10
(iv) the aggregate amount of- ( aa) acceptances; and (bb) self-liquidating bills or promissory notes aris-
ing out of the movement of goods and discount- able by the Reverve Bank, with a maturity not 15 exceeding one hundred and twenty days or, in the case of agricultural bills, six months,
which rank as liquid assets, shall not exceed twen- ty per cent of the total amount of liquid assets to be maintained by a banking· institution in terms of this 20 subsection after deduction of the reserve balance referred to in section sixteen, without, however, any of the foregoing provisions of this paragraph prohibiting a banking institution from holding, for purposes other than minimum liquid assets, any 25 such acceptances, bllls or promissory notes in ex- cess of the aggregate amount which may, in terms of the said foregoing provisions, be included in the required minimum liquid assets
(v)) fu:) in determining its liabilities referred to in para- 30 graph (a), a [banking institution]~ shall, in re- spect of each of its branches, including its head office, where the total amount of its demand liabi- lities can be determined daily, bring into account the average daily amount of such liabilities for all 35 the [business] days in the month in question, instead of the amount of such liabilities at the end of such month.";
(b) by the substitution for subsection (2) of the following subsection: 40
"(2) (a) The Minister may by notice in the Gazette determine that in respect of the business con- ducted by a bank outside the Republic in accord- ance with section 13 (2) (b), liquid assets shall be maintained as prescribed in subsection (1) of this 45 section.
(b) The Registrar may by notice in the Gazette issue directives in regard to the correlation of maturities of the liabilities and investments expressed in for- eign currencies of the business carried on by a 50 bank outside the Republic as contemplated in sec- tion 13(2) (b)."; and
(c) by the substitution for subsection (3) of the following subsection:
"(3) For the purposes of subsection (1) a remittance 55 in transit means the amount of a cheque or other order to pay drawn on one of a bank's branches in the Re- public or on another bank in the Republic or on the Reserve Bank, with which another branch in the Re- public of the bank concerned has credited a client or 60 which it has paid out but with which the first-mentioned
28 No. 9865
Act No. 106, 1985
Repeal of section 18 of Act23 of 1965, as substituted by section 15 of Act 91 of 1972 and amended by section 17 of Act 94 of 1977, section 30 of Act 103 of 1979, section 17 of Act 82 of 1982 and section 26 of Act 86 of 1984.
Substitution of section 19 of Act 23 of1965.
Amendment of section 20 of Act 23 of 1965.
Substitution of section 24 of Act 23 of 1965.
Substitution of section 25 of Act 23 of1965.
Substitution of section 27 A of Act 23 of 1965, as inserted by section 48 of Act 101 of 1976.
GOVERNMENT GAZETTE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
branch or such other bank or the Reserve Bank has not yet debited a client, and includes the amount of a war- rant voucher which the bank has paid out or with which it has credited a client but for which it has not yet re- ceived repayment from the Secretary to the Treasury.". 5
23. Section 18 of the Banks Act, 1965, is hereby repealed.
24. The following section is hereby substituted for section 19 of the Banks Act, 1965: · "Period for maintenance of prescribed minima.
19. A banking institution shall maintain any mini- mum amount prescribed by or under section four- 10 teen, fifteen, sixteen 2! seventeen [or eighteen] at all times during the period from the date of certification under paragraph (a) or (c) of subsection (1) of sec- tion thirteen of the statement or return by reference to which that amount is determined, until the day 15 preceding the date on which the next succeeding such statement or return is so certified.".
25. Section 20 of the Banks Act, 1965, is hereby amended- ( a) by the deletion in the second proviso to subsection (1)
of the word "commercial"; and 20 (b) by the deletion of subsection (2).
26. The following section is hereby substituted for section 24 ofthe Banks Act, 1965: "Liquidas- setsmaynot be pledged or encum- bered.
24. No portion of the assets constitutin~ the liquid assets [or the prescribed investments] wh1ch a bank- 25 ing institution is, in terms of this Act, required to hold and maintain, shall be pledged or otherwise en- cumbered: Provided that the Minister may exempt any banking institution from the provisions of this section on such conditions and to such an extent and 30 for such a period as he may determine, if he is satis- fied that special circumstances demand such action.".
27. The following section is hereby substituted for section 25 ofthe Banks Act, 1965: "Valuation 25. For the purpose of sections seventeen [and 35 of securities. eighteen] securities shall be valued at their market
value, as certified by the [secretary of the board of] Public [Debt] Investment Commissioners.".
28. The following section is hereby substituted for section 27 A of the Banks Act, 1965: 40 "Banking institution's subsidiary, branch office and otherin- terests.
27 A. A banking institution shall not establish or acquire a subsidiary company or open a branch office outside the Republic or acquire an interest in an undertaking referred to in section 13 (2) (b) unless the prior written authority of the Registrar has been 45 obtained.".
30 No. 9865
Act No. 106, 1985
Substitution of section 27C of Act23 of1965, as inserted by section 48 of Act 101 of 1976 and substituted by section 19 of Act 94 of 1977.
Insertion of section 27E in Act 23 of 1965.
Substitution of section 28D of Act23 of 1965, as inserted by section 50 of Act 101 of 1976 and amended by section 28 of Act 86 of 1984.
GOVERNMENTGAZETTE,31JULY1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
29. The following section is hereby substituted for section 27C of the Banks Act, 1965: "Limitation on bank con- trolling com- panywhich controls a discount house.
27C. [A banking institution or a registered bank controlling company shall not without the written ap- proval of the registrar, directly or indirectly control 5 more than one banking institution in any class of banking institution mentioned in section 1 (1), or, in the case of a controlling banking institution, a bank- ing institution of the same class as it: Provided that] A registered bank controlling company which controls 10 a discount house shall not control any other banking institution.".
30. The following section is hereby inserted in the Banks Act, 1965, after section 27D: "Prohibition of certain business by bank con- trolling com- pany outside Republic.
27E. A bank controlling company or its subsidiary 15 which is not registered as a banking institution under this Act, shall not carry on outside the Republic the business of a banking institution (as defined in sec- tion 1 (2)).".
31. The following section is hereby substituted for section 28D 20 of the Banks Act, 1965: ''Limitation of sharehold- ingina bank and bank controlling company.
28D. (1) Subject to the provisions of subsections (2) and ( 4) of this section and of sections 28B and 28E, a [banking institution (other than a discount house)] ~ or a bank controlling company shall not 25 register shares in it in the name of a person other than a registered [banking institution] bank or a registered bank controlling company or a company approved by the registrar in terms of section 12A (4), except in so far as the total nominal value of the 30 shares which are to be registered together with those which are already registered in the name of- (i) a financial company approved by the registrar in
respect of such [banking institution] bank or bank controlling company for the purposes of 35 this section, and its associates, does not exceed thirty per cent; and
(ii) any other person and his associates does not ex- ceed ten per cent,
of the total nominal value of all the issued shares in 40 the [banking institution] ~ or bank controlling company.
(2) The Minister may, in special cases where he is satisfied that it is desirable in the public interest, authorize a [banking institution (other than a dis- 45 count house)] bank or bank controlling company in writing to exce-;;(ithe percentages mentioned in sub- section (1) in respect of domestic shareholders, on the conditions and to the extent determined by the Mine ister. 50
(3) A discount house shall not register shares in it in the name of a person (other than a registered bank controlling company) and his associates of which the total nominal value exceeds ten per cent of the total nominal value of all the issued shares in the discount 55 house.
( 4) Shares which are transferred to the executor, administrator, curator, trustee or guardian in respect of the estate of a deceased shareholder of the bank- ing institution or bank controlling company or of a 60 shareholder whose estate has been sequestrated or of a shareholder who is otherwise incapable of contract- ing or the liquidator of a corporate body in the pro- cess of liquidation, which is a shareholder of the banking institution or bank controlling company, 65 shall not be deemed to be registered in the name of
32 No.9865
Act No. 106, 1985
GOVERNMENT GAZETTE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
the shareholder nomine officii but shall be deemed to be registered in the name of the various beneficia- ries: Provided that [in the case where] the voting power that such a shareholder nomine officii [owing to the voting power attached to shares registered in 5 his name, is able to control the banking institution or bank controlling company, the voting power which he] can exercise in respect of all the shares under his control shall, notwithstanding anything to the con- trary contained in any other law, be limited to ten 10 per cent of the votes attached to all the issued shares of the banking institution or bank controlling com- pany.
(5) Where at the commencement of the Financial Institutions Amendment Act, 1976, the total nominal 15 value of shares in a [banking institution (other than a discount house)]~ or bank controlling company, registered in the name of a financial company and its associates or any other person and his associates, ex- ceeds the relative percentage mentioned in subsec- 20 tion (1), the shares may, subject to the provisions of section 28E, remain so registered but, save with the approval of the Registrar, granted on such conditions as he deems necessary where he is satisfied-
(i) that the interests of the [banking institution] 25 bank or bank controlling company will other- wise be detrimentally affected; and
(ii) that compliance with the limits referred to in subsection (1) will not be unduly delayed,
no further shares in the [banking institution] bank or 30 bank controlling company shall be registered in the name of that shareholder or his associates as long as the relative percentage is exceeded.
(6) If at the commencement of the Financial Insti- tutions Amendment Act, 1976, the total nominal 35 value of shares in a discount house which is regis- tered in the name of a person and his associates, ex- ceeds the ratio referred to in subsection (3), no fur- ther shares shall be registered in the name of such person or that of his associates, and the discount 40 house shall within six months from the date of the said commencement submit a scheme to the registrar whereby the shareholdings which exceed the limit mentioned in subsection (3) will be reduced within a period acceptable to the registrar to the extent that 45 the required ratio will be complied with.
(6A) If as a result of the amalgamation of share- holders or the take-over of one shareholder by an- other after 1 August 1976, the total nominal value of shares in a discount house which are registered in the 50 name of a person and his associates at the com- mencement of section 28 of the Financial Institutions Amendment Act, 1984, or thereafter exceeds the ra- tio referred to in subsection (3), no further shares shall be registered in the name of such person or the 55 names of his associates, and the discount house shall within six months after the date of that commence- ment or, where any such exceeding takes place after that commencement, within six months from the date of the amalgamation or take-over in question, submit 60 a scheme to the registrar whereby the shareholdings which exceed the limit mentioned in subsection (3) will be reduced, within a period acceptable to the registrar, to the extent that the required ratio will be complied with. 65
34 No.9865
Act No. 106, 1985
Insertion of section 280 in Act23of1965.
Substitution of section 29 of Act 23 of 1965, as substituted by section 51 of Act 101 of 1976.
Amendment of section 30A of Act23 of 1965, as inserted by section 11 of Act 82 of 1965 and substituted by section 20 of Act 94 of 1977.
Amendment of section 48 of Act 23 of 1965, as amended by section 25 of Act 36 of 1981 and section 31 of Act 86 of 1984.
Amendment of section 49 of Act 23 of 1965, as amended by section 6 of Act 23 of 1970 and section 32 of Act 86 of 1984.
Amendment of section 1 of Act 24 of1965, as amended by section 1 of Act 64 of 1968, section 5 of Act 67 of 1973, section 54 of Act 101 of 1976, section 22 of Act 80 of 1978, section 50 of Act 99 of 1980, section 18 of Act 82 of 1982, section 20 of Act 46 of 1984 and section 34 of Act 86 of 1984.
GOVERNMENTGAZETTE,31JULY1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
(7) The provisions of subsections (5), (6) and (6A) shall not be construed as meaning that as long as the relative ratio is exceeded, shares may not be transfer- red within a group of associates.".
32. The following section is hereby inserted after section 28F 5 ofthe Banks Act, 1965:
"Restriction 28G. After the comin into o eration of the Finan- g~0';~~ain ap- cia! Institutions Amendment Act, 1985, the registrar
shall not grant approval under paragraph (i) of sub- section (1) of section 28D to more than one financial 10 company per banking institution or bank controlling company.".
33. The following section is hereby substituted for section 29 of the Banks Act, 1965: "Limitation on certain activities of banks.
29. (1) A [commercial] bank which has a branch 15 system and which accepts money on deposit which is withdrawable by chegue and which has been ad- mitted to the clearing house of banks, shall not carry on any business in the Republic through a person who is not its full-time servant: Provided that such a 20 bank may raise deposits through an agent and pay commission to such agent in respect thereof.
(2) A banking institution [other than a commercial bank] shall not without the written approval of the Registrar accept deposits of money withdrawable by 25 cheque unless it offered that facility prior to 1 J anu- ary[1975] 1985.".
34. Section 30A of the Banks Act, 1965, is hereby amended by the deletion of the word "general" in paragraph (a) of sub- section (1). 30
35. Section 48 of the Banks Act, 1965, is hereby amended by the substitution for paragraph (b) of subsection (1) of the follow- ing paragraph:
"(b) returns, statements and documents furnished in terms of section 13 (1) (a), (b), [(c)] (d) or (e) or section 34, 35 in respect of the last ten preceding calendar years.".
36. Section 49 of the Banks Act, 1965, is hereby amended by the deletion in subsection (5) of the word "eighteen".
37. Section 1 of the Building Societies Act, 1965, is hereby amended- 40
(a) by the substitution for the word "thirty", wherever it appears in the definition of "medium-term liability", of the word "thirty-one";
(b) by the deletion of the definition of "prescribed invest- ments"· and 45
(c) by the 'substitution for the word "thirty"; wherever it appears in the definition of "short-term liability", of the word "thirty-one".
36 No.9865
Act No. 106, 1985
Amendment of section 29 of Act24of1965, as amended by sectionS of Act 64 of 1968, section 2 of Act91 of1969, section 26 of Act 80 of 1978 and section 20 of Act 46 of 1984.
Amendment of section 31 of Act24of1965, as amended by section 9 of Act64 of 1968 and section 27 of Act 80 of 1978.
Repeal of section 32 of Act 24 of 1965, as amended by section 19 of Act 91 of 1972, section 22 of Act 94 of 1977, section 19 of Act82of1982 and section 36 of Act86of1984.
Amendment of section 38 of Act24 of1965, as amended by section 14 of Act 58 of 1966, section 11 of Act 64 of 1968, section 8 of Act 67 of 1973 and section 28 of Act 80 of 1978.
Short title and commencement.
GOVERNMENT GAZETTE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
38. Section 29 of the Building Societies Act. 1965. is hereby amended-
( a) by the deletion of the words "or prescribed invest- ments"· and
(b) by the 'insertion after paragraph (b) of the following 5 paragraph:
" c in de osits loans bills bonds and other securities which immediately prior to the commencement of section 37 of the Financial Institutions Amend- ment Act, 1985, constituted 'prescribed invest- 10 ~.".
39. Section 31 of the Building Societies Act, 1965, is hereby amended- ·
(a) by the substitution for paragraph (a) of subsection (1) of the following paragraph: 15
"(a) [thirty] twenty per cent of its liabilities in respect of transmission deposits;";
(b) by the deletion of subsection (1A); and (c) by the substitution in subsection (4) for the words "sec-
retary of the board of public debt commissioners" of 20 the words "Public Investment Commissioners".
40. Section 32 of the Building Societies Act, 1965, is hereby repealed.
41. Section 38 of the Building Societies Act, 1965, is hereby amended by the substitution for subsection ( 1) of the following 25 subsection:
"(1) A reducible mortgage of immovable property shall provide for the repayment of the capital amount ad- vanced[- (a) within a period of not more than thirty years where 30
such capital amount does not exceed twenty thousand rand and the mortgaged property is property on which a dwelling house has been or is to be erected; or
(aA) within a period of not more than twenty-five years where such capital amount exceeds twenty thousand 35 rand but not thirty thousand rand and the mortgaged property is property on which a dwelling house has been or is to be erected; or
(b)] within a period of not more than [twenty] thirty years [in all other cases]: Provided that if any portion of the 40 capital amount advanced has been repaid to and re- advanced by the society, the period within which the balance of such capital amount and the amount so re- advanced shall be repaid, shall be reckoned from the date of the re-advance: Provided further that where a 45 society increases the rate of interest on an advance, this subsection shall not be so construed that it requires the society to increase the regular payments of such advance.".
42. (1) This Act shall be called the Financial Institutions 50 Amendment Act, 1985. ·
(2) Section 8 shall be deemed to have come into operation on 18 July 1984.
(3) Section 39 (a) shall be deemed to have come into opera- tion on 1 March 1984. 55
38 No. 9865
Act No. 106, 1985
GOVERNMENT GAZETIE, 31 JULY 1985
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1985
(4) (a) Sections 18 (c), 19 and 35 shall come into operation on a date fixed by the State President by proclamation in the Gazette;
(b) Different dates may be so fixed in respect of the differ- ent sections mentioned in paragraph (a). 5