• The EFF wants to change banking law to allow a state-owned bank to compete directly with commercial banks.
  • EFF MP Floyd Shivambu is introducing the changes through a private members Bill in parliament.
  • This is the – very simple, especially considering its possible impact – text of that Bill.



The Economic Freedom Fighters (EFF) on Monday made public its draft text for a Banks Amendment Bill, submitted to Parliament as a private member's bill by MP Floyd Shivambu.

Shivambu hopes to change the law to allow the Post Office's Postbank to be licensed as a full-fledged bank, capable of competing with the dominant commercial banks. However, the law would allow any state-owned company to set up a new bank – or take over an existing bank, whether by acquisition or some form of the expropriation favoured by the EFF.

The rules of the National Assembly require an "explanatory summary" of such a private Bill to be published in the Government Gazette before its submission. The EFF did that on 25 April, saying it wanted to make it possible for a state-owned company to conduct the business of a bank.

The draft text of the Bill, provided by the EFF on Monday, does exactly that – no more and no less. The ten changes it proposes all consist of inserting the words "or state-owned company" or its plural where the current law refers to public companies as owners and operators of banks.

Here is the full text of the draft Bill.


REPUBLIC OF SOUTH AFRICA

__________

BANKS AMENDMENT BILL

_____________

(As introduced in the National Assembly (proposed section 75);

prior notice of its introduction together with an explanatory summary of Bill published in Government Gazette No. 41595 of 2018)

(The English text is the official text of the Bill)

____________

(MR NF SHIVAMBU, MP)

[B -2018]

 

GENERAL EXPLANATORY NOTE:

[ ]Words in bold type in square brackets indicate omissions from existing enactments.

__________________Words underlined with a solid line indicate insertions in existing enactments.


BILL

To amend the Banks Act, 1990 so as amend and insert certain definitions; to enable a state-owned company to register and conduct the business of a bank in terms of the Banks Act; to allow a state-owned company to register an appropriate memorandum of incorporation with the Commissioner appointed in terms of the Companies Act,; to enable a state-owned company to exercise control over a bank; to allow a state-owned company to be eligible to apply for registration as a controlling company; and to provide for matters connected therewith. 

BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:—

Amendment of section 1 of Act 94 of 1990, as amendment by section 1 of Act 42 of 1992, section 1 of Act 9 of 1993, section 1 of Act 26 of 1994, section 1 of Act 55 of 1996, section 1 of Act 36 of 2000, section 1 of Act 19 of 2003, section 1 of Act 20 of 2007, section 1 of Act 22 of 2013 and section 290 read with Schedule 4 of Act 9 of 2017

1. Section 1 of the Banks Act, 1990 (Act No. 94 of 1990) (hereinafter referred to as the “principal Act”), is hereby amended—

(a) by the substitution for the definition of “bank” of the following definition:

“bank” means a public company or a state-owned company registered as a bank in terms of this Act;”;

(b) by the substitution for the definition of “branch” of the following definition: 

 “branch” means an institution that is not a public company or a state-owned company as contemplated in section 11(1), but by means of which a foreign institution conducts the business of a bank in the Republic under an authorisation referred to in section 18A;”;

(c) by the substitution for the definition of “controlling company” of the following definition:

“controlling company” means a public company or a state-owned company registered in terms of this Act as a controlling company in respect  of a bank;”; and 

(d) by the insertion after the definition of “securitisation scheme” of the following definition:

 “ state-owned company” has the meaning ascribed to that expression in section 1 of the Companies Act;”. 

Amendment of section 11 of Act 94 of 1990, as amended by section 5 of Act 26 of 1994

2. Section 11 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection:

“(1) Subject to the provisions of section 18A, no person shall conduct the business of a bank unless such person is a public company or a state-owned company and is registered as a bank in terms of this Act.”.

Amendment of section 13 of Act 94 of 1990, as amended by section 6 of Act 9 of 1993, section 9 of Act 19 of 2003, section 6 of Act 22 of 2013 and section 290 read with Schedule 4 of Act 9 of 2017 

3. Section 13 of the principal is hereby amended by the substitution in subsection (2) for paragraph (c) of the following paragraph:

(c that the applicant will conduct the proposed business of a bank in the capacity of a public company or a state-owned company incorporated and registered under the Companies Act;”. 

 

Amendment of section 15 of Act 94 of 1990, as amended section 7 of Act 26 of 1994, section 11 of Act 19 of 2003, section 7 of Act 22 of 2013 and section 290 read with Schedule 4 of Act 9 of 2017 

4. Section 15 of the principal Act is hereby amended—

(a)  by the substitution for subsection (1) of the following subsection:

“(1) No public company or a state-owned company shall without the written approval of the Authority be formed in terms of the Companies Act to conduct the business of a bank in accordance with the provisions of this Act.”; and 

(b) by the substitution for subsection (3) of the following subsection:

“(3) Notwithstanding anything to the contrary contained in the Companies Act, the Commissioner shall not register in terms of that Act the memorandum of incorporation of a public company or a state-owned company 3formed for the purpose of conducting the business of a bank, unless the application for such registration is accompanied by the approval referred to in subsection (1).”. 

Amendment of section 42 of Act 94 of 1990 as amended by section 5 of Act 42 of 1992, section 33 of Act 26 of 1994, section 29 of Act 19 of 2003 and section 290 read with Schedule 4 of Act 9 of 2017

5. Section 42 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection:

“(1) Subject to the provisions of section 37, no person other than a bank or an institution which has been approved by the Authority and which conducts business similar to the business of a bank in a country other than the Republic may exercise control over a bank, unless such person is a public company or a state-owned company and is registered as a controlling company in respect of such bank.”.

Amendment of section 43 of Act 94 of 1990 as amended by section 34 of Act 26 of 1994, section 30 of Act 19 of 2003, section 10 of Act 20 of 2007, section 19 of Act 22 of 2013 and section 290 read with Schedule 4 of Act 9 of 2017

6. Section 43 of the principal Act is hereby amended—

(a) by the substitution in subsection (1) for the words preceding paragraph (a) of the following words:

“(1) Subject to section 42, a public company or a state-owned company—”;

(b) by the substitution in subsection (1) for paragraph (b) of the following paragraph:

 (b) which is a holding company, as defined in section 1 of the Companies Act, in respect of any other public company or a state-owned company which has applied in terms of section 16 for registration as a bank,”; and

(c) by the substitution for subsection (3) of the following subsection:

“(3) A public company or a state-owned company applying in terms of subsection (1) for registration as a controlling company shall submit such additional particulars in connection with its application as the Authority may require.”.

Amendment of section 44 of Act 94 of 1990 as amended by section 10 of Act 9 of 1993, section 31 of Act 19 of 2003, section 20 of Act 22 of 2013 and section 290 read with Schedule 4 of Act 9 of 2017

7. Section 44 of the principal Act is hereby amended by the substitution for subsection (7) of the following subsection: 

“(7) A public company or a state-owned company which on the date immediately preceding the date of commencement of the Deposit-taking Institutions Amendment Act, 1993 (hereinafter in this subsection referred to as the Amendment Act), is, in  terms of the provisions of this Act as those provisions existed prior to the amendment thereof by the Amendment Act, registered as a controlling company in respect of a deposit-taking institution, shall, with effect from the date of the reregistration of the deposit-taking institution concerned as a bank in terms of section 33, be deemed to be a controlling company registered as such in terms of this section in respect of the bank as so reregistered.”. 

Amendment of section 51 of Act 94 of 1990 as amended by section 11 of Act 9 of 1993, section 34 of Act 19 of 2003, section 22 of Act 22 of 2013, section 1 of Act 3 of 2015 and section 290 read with Schedule 4 of Act 9 of 2017

8. Section 51 of the principal Act is hereby amended by the substitution in subsection (1) for paragraph (a) of the following paragraph:

(a)the provisions of the Companies Act governing the conversion of public companies or state-owned companies into other forms of companies shall not apply to any such company;”.

Amendment of section 68 of Act 94 of 1990 as amended by section 16 of Act 9 of 1993, section 42 of Act 26 of 1994, section 9 of Act 36 of 2000, section 46 of Act 19 of 2003, section 36 of Act 22 of 2013, and section 290 read with Schedule 4 of Act 9 of 2017

9. Section 68 of the principal Act is hereby amended by the substitution in subsection (5) for the words following  paragraph (b) of the following words:

“and the Authority, the Master of the High Court, the provisional liquidator or liquidator, respectively, shall, until the affairs of the public company or a state-owned company of which the registration as a bank has been so suspended, cancelled or terminated have been completely wound up as contemplated in section 82 (1) of the Companies Act or until the winding-up is stayed or set aside by an order of a competent court continue to exercise their respective powers and to perform their respective duties under this section or in terms of the Companies Act, in respect of the public company or a state-owned company of which the registration as a bank has been so suspended, cancelled or terminated, as if such suspension, cancellation or termination had not taken place.”.

Amendment of section 69 of Act 94 of 1990 as amended by section 8 of Act 42 of 1992, sections 17 and 25 of Act 9 of 1993, section 43 of Act 26 of 1994, section 6 of Act 55 of 1996, section 10 of Act 36 of 2000, section 47 of Act 19 of 2003, section 37 of Act 22 of 2013, section 2 of Act 3 of 2015 and section 290 read with Schedule 4 of Act 9 of 2017

10. Section 69 of the principal Act is hereby amendment by the substitution in subsection 8 for the words following paragraph (b) of the following words:

“and the Minister, the Authority and the curator, respectively, shall until such time as the curatorship is terminated continue to exercise their respective powers and to execute their respective duties under this section in respect of the public company  or a state-owned company of which the registration as a bank has been so suspended, cancelled or  terminated, as if such suspension, cancellation or termination had not taken place.”. 

Short Title and Commencement

This Act is called the Banks Amendment Act, 2018, and comes into operation on a date determined by the President by proclamation in the Gazette.


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