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uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
n South The
Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$
Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
,@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Page v
Preface
Modern-day banks are multifunctional institutions. The law governing the activities
of banks and banking generally covers a huge and diverse field, impossible to cover
in any detail in a single volume. The purpose of this book is to provide an
explanation of some of the more important aspects of the law applicable to banks
and banking in South Africa, along with the principles that govern payment and
payment systems in this country.
Chapter 1 provides a general introduction and a framework for what is to follow.
It explains the role of banks in commerce, the different types of banks, the legal
nature of a bank and what the business of banking encapsulates. Chapter 2 goes on
to consider the diversity of our banking law, the phenomena that have attributed to
this diversity, and the present sources of our law. Chapter 3 is devoted to a
discussion of the role and function of the Reserve Bank and the various statutes that
regulate banks. Chapters 4 and 5 consider in some detail the legal nature and
consequences of the ‘bank-customer contract’ and a range of services provided by
banks. Chapter 6 focuses on the general principles that govern the payment of
monetary debts, and Chapter 7 focuses on the law applicable to various payment
systems. The topic of chapter 8 is the law governing unauthorised cheque payments
and unauthorised electronic funds transfers. Chapter 9 introduces an international
dimension, discussing payment in, and the financing of, international sale
transactions. The concluding chapter, chapter 10, is a comprehensive treatment of
different types of demand guarantees and the principles governing these
guarantees.
The writers have attempted to explain the law simply and succinctly, consigning
matters of detail, as far as possible, to footnotes. In some places, this has resulted
in fairly detailed and lengthy footnotes. The basic objective was to provide a text
that is both accessible for students and other persons seeking to gain a basic
understanding of the subject, and comprehensive enough to be of use to lawyers,
bankers and those who work in the field of banking and finance. It was decided not
to include any treatment of the law governing negotiation and liability on cheques
and other negotiable instruments since this is a field already adequately covered by
existing texts.
Thanks must be given to all who have assisted in the task of producing this book,
in particular Deidre du Preez, the production co-ordinator, and Brian Hopking, the
typesetter. I am particularly grateful to Linda van de Vijver for her professional
expertise and for her unwavering support and enthusiasm for this project. The
publication of this book is due, in no small measure, to her ongoing efforts.
Robert Sharrock (managing editor)
Pietermaritzburg
September 2016
Page vii
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n South The
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Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
,@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Table of contents
Preface
Chapter 1: Banks and banking law
(WG Schulze)
1.1
The role of banks in commerce
1.2
The South African banking sector
1.3
Different types of banks
1.3.1
Introduction
1.3.2
First-tier banks
(i)
Commercial banks
(ii)
Investment banks
(iii)
The Land and Agricultural Development Bank of South Africa
(iv)
The Development Bank of Southern Africa
1.3.3
Second-tier banks
(i)
Mutual banks
(ii)
The Postbank of South Africa
(iii)
Co-operative banks
1.3.4
Third-tier banks
(i)
Village banks
(ii)
Dedicated banks
(iii)
Stokvels
(iv)
Mobile banking services
1.4
The Banks Act
1.4.1
Introduction
1.4.2
The definition of ‘bank’
(i)
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,@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Introduction
(ii)
The definition of ‘the business of a bank’ and excluded activities
(a)
Definition
(b)
Exclusions
(iii)
The definition of ‘deposit’ and excluded payments
(a)
Introduction
(b)
Definition
(c)
Exclusions
1.4.3
Miscellaneous matters
List of works cited
Page viii
Chapter 2: The nature of banking law and its sources
(WG Schulze)
2.1
Introduction
2.2
The diversity of South African banking law
2.3
Fundamental phenomena in South African banking law
2.3.1
Banking law as part of the law of obligations
2.3.2
Bank–customer relationship a multi-faceted one
2.3.3
Government policy of legislating to replace the common law
2.3.4
Globalisation
2.3.5
Major practical changes in banking sector
2.4
The sources of South African banking law
2.4.1
The distinction between primary sources and secondary sources
2.4.2
Primary sources
(i)
Legislation
(ii)
Judicial precedent
(iii)
Custom or trade usage
(iv)
Roman law
@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
n South The
Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$
Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
n South The
Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$
Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
,@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Page v
Preface
Modern-day banks are multifunctional institutions. The law governing the activities
of banks and banking generally covers a huge and diverse field, impossible to cover
in any detail in a single volume. The purpose of this book is to provide an
explanation of some of the more important aspects of the law applicable to banks
and banking in South Africa, along with the principles that govern payment and
payment systems in this country.
Chapter 1 provides a general introduction and a framework for what is to follow.
It explains the role of banks in commerce, the different types of banks, the legal
nature of a bank and what the business of banking encapsulates. Chapter 2 goes on
to consider the diversity of our banking law, the phenomena that have attributed to
this diversity, and the present sources of our law. Chapter 3 is devoted to a
discussion of the role and function of the Reserve Bank and the various statutes that
regulate banks. Chapters 4 and 5 consider in some detail the legal nature and
consequences of the ‘bank-customer contract’ and a range of services provided by
banks. Chapter 6 focuses on the general principles that govern the payment of
monetary debts, and Chapter 7 focuses on the law applicable to various payment
systems. The topic of chapter 8 is the law governing unauthorised cheque payments
and unauthorised electronic funds transfers. Chapter 9 introduces an international
dimension, discussing payment in, and the financing of, international sale
transactions. The concluding chapter, chapter 10, is a comprehensive treatment of
different types of demand guarantees and the principles governing these
guarantees.
The writers have attempted to explain the law simply and succinctly, consigning
matters of detail, as far as possible, to footnotes. In some places, this has resulted
in fairly detailed and lengthy footnotes. The basic objective was to provide a text
that is both accessible for students and other persons seeking to gain a basic
understanding of the subject, and comprehensive enough to be of use to lawyers,
bankers and those who work in the field of banking and finance. It was decided not
to include any treatment of the law governing negotiation and liability on cheques
and other negotiable instruments since this is a field already adequately covered by
existing texts.
Thanks must be given to all who have assisted in the task of producing this book,
in particular Deidre du Preez, the production co-ordinator, and Brian Hopking, the
typesetter. I am particularly grateful to Linda van de Vijver for her professional
expertise and for her unwavering support and enthusiasm for this project. The
publication of this book is due, in no small measure, to her ongoing efforts.
Robert Sharrock (managing editor)
Pietermaritzburg
September 2016
Page vii
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n South The
Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$
Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
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uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Table of contents
Preface
Chapter 1: Banks and banking law
(WG Schulze)
1.1
The role of banks in commerce
1.2
The South African banking sector
1.3
Different types of banks
1.3.1
Introduction
1.3.2
First-tier banks
(i)
Commercial banks
(ii)
Investment banks
(iii)
The Land and Agricultural Development Bank of South Africa
(iv)
The Development Bank of Southern Africa
1.3.3
Second-tier banks
(i)
Mutual banks
(ii)
The Postbank of South Africa
(iii)
Co-operative banks
1.3.4
Third-tier banks
(i)
Village banks
(ii)
Dedicated banks
(iii)
Stokvels
(iv)
Mobile banking services
1.4
The Banks Act
1.4.1
Introduction
1.4.2
The definition of ‘bank’
(i)
@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
n South The
Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$
Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
,@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
uth Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$
The Law of Banking and Payment in South Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Introduction
(ii)
The definition of ‘the business of a bank’ and excluded activities
(a)
Definition
(b)
Exclusions
(iii)
The definition of ‘deposit’ and excluded payments
(a)
Introduction
(b)
Definition
(c)
Exclusions
1.4.3
Miscellaneous matters
List of works cited
Page viii
Chapter 2: The nature of banking law and its sources
(WG Schulze)
2.1
Introduction
2.2
The diversity of South African banking law
2.3
Fundamental phenomena in South African banking law
2.3.1
Banking law as part of the law of obligations
2.3.2
Bank–customer relationship a multi-faceted one
2.3.3
Government policy of legislating to replace the common law
2.3.4
Globalisation
2.3.5
Major practical changes in banking sector
2.4
The sources of South African banking law
2.4.1
The distinction between primary sources and secondary sources
2.4.2
Primary sources
(i)
Legislation
(ii)
Judicial precedent
(iii)
Custom or trade usage
(iv)
Roman law
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n South The
Africa.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$
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