LML4807
ASSIGNMENT 2
DUE DATE: 5 MAY 2025
, LML4807 Semester 1
Assignment 02
Submission date and time: 05 May 2025: 21h00
Read the following statement and answer the question that
follows.
“Often an entity that is given the name of a bank and renders services that are
associated with that of a bank does not always satisfy the legal requirements for
conducting the business of a bank. Also, not every entity or person rendering similar
services is required to comply with the registration requirements to render such services
in terms of South African law. Under certain circumstances, a conduct that seems to
satisfy the registration requirements may also be excluded from such requirements”.
With reference to the requirements for conducting “the business of a bank” and
the taking of “deposit” in terms of the Banks Act (94 of 1990), critically discuss
the correctness of the above statement. Your discussion must be formulated
under the following subheadings:
(a) The legal issue that arises from the statement
In terms of section 11(1) of the Banks Act 94 of 1990, the legal issue relates to when
an entity is required to be registered as a bank due to conducting “the business of a
bank.” The statement raises the question of whether offering services that appear
similar to banking (such as taking deposits) without formal registration is lawful, and
under what conditions such activities are exempt from the registration
requirement.¹
1
Banks Act 94 of 1990, s 11(1).
ASSIGNMENT 2
DUE DATE: 5 MAY 2025
, LML4807 Semester 1
Assignment 02
Submission date and time: 05 May 2025: 21h00
Read the following statement and answer the question that
follows.
“Often an entity that is given the name of a bank and renders services that are
associated with that of a bank does not always satisfy the legal requirements for
conducting the business of a bank. Also, not every entity or person rendering similar
services is required to comply with the registration requirements to render such services
in terms of South African law. Under certain circumstances, a conduct that seems to
satisfy the registration requirements may also be excluded from such requirements”.
With reference to the requirements for conducting “the business of a bank” and
the taking of “deposit” in terms of the Banks Act (94 of 1990), critically discuss
the correctness of the above statement. Your discussion must be formulated
under the following subheadings:
(a) The legal issue that arises from the statement
In terms of section 11(1) of the Banks Act 94 of 1990, the legal issue relates to when
an entity is required to be registered as a bank due to conducting “the business of a
bank.” The statement raises the question of whether offering services that appear
similar to banking (such as taking deposits) without formal registration is lawful, and
under what conditions such activities are exempt from the registration
requirement.¹
1
Banks Act 94 of 1990, s 11(1).
