UNISA School of Law LML4807- Complete Banking Law and Usage Referencing Guide, Assignment Tips & Survival Handbook for All LLB Students |2026 update.

, CONTENTS
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LESSON 0: INTRODUCTION TO LML4807 1
0.1 OUTCOMES FOR LML4807 1
0.2 MODULE CREDITS AND NOTIONAL HOURS
REQUIRED FROM STUDENTS 2
0.3 HOW TO EFFECTIVELY MASTER THE CONTENT OF
THE MODULE 2
0.4 PRACTICAL ASPECTS ON STUDYING THIS MODULE 2
0.5 GLOSSARY OF TERMS 4
0.6 CONCLUSION 4

LESSON 1: BANKING LAW AS A FIELD OF STUDY 5
1.1 INTRODUCTION 5
1.2 THE NATURE AND SCOPE OF BANKING LAW 6
1.3 THE EFFECT OF THE CONSTITUTION OF THE
REPUBLIC OF SOUTH AFRICA, 1996, ON BANKING LAW 8
1.4 THE NATURE AND SCOPE OF THIS MODULE 10
1.5 CONCLUSION 11

LESSON 2: SOURCES OF BANKING LAW 12
2.1 INTRODUCTION 12
2.2 THE SIGNIFICANCE OF ENGLISH LAW IN SOUTH
AFRICAN BANKING LAW 13
2.3 SURVEY OF THE SOURCES OF BANKING LAW 15
2.3.1 Statutes 15
2.3.2 Terms of contract 16
2.3.3 Law of negotiable instruments 16
2.3.4 Customary law and trade usage 18
2.4 THE RELEVANCE OF LEGAL SOURCES REGARDING
THE TERMS OF A CONTRACT 18
2.4.1 Terms deriving from common law 22
2.4.2 Terms derived from legislation 23
2.4.3 Customary law and trade usage 23
2.4.3.1 Trade usage 23
2.5 INDIGENOUS BANKING LAW 26
2.5.1 Introduction 26
2.5.2 Stokvels 27
2.5.2.1 Introduction 27

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2.5.2.2 Different types of stokvel 28
2.5.2.3 The stokvel as a credit-rotating association 29
2.5.3 Stokvels: commercial banks and the National Credit Act 31
2.5.3.1 Ordinary commercial banks 31
2.5.3.1.1 General 31
2.5.3.1.2 Stokvels exempted from Banks Act 32
2.5.3.2 Stokvels and the National Credit Act 34
2.5.4 The future development of indigenous banking law 34
2.6 Islamic law 35
2.7 CONCLUSION 36

LESSON 3: THE SOUTH AFRICAN BANKING SYSTEM 37
3.1 INTRODUCTION 37
3.2 SOUTH AFRICAN RESERVE BANK 38
3.2.1 Establishment of the central bank of South Africa: the
Reserve Bank 38
3.2.2 The Reserve Bank and the Constitution 39
3.2.3 Powers and duties of the Reserve Bank 39
3.2.4 Functions of the Reserve Bank 40
3.2.4.1 Issue of notes 40
3.2.4.2 Banker, agent and adviser of the government 41
3.2.4.3 Custodian of bank’s cash reserves 41
3.2.4.4 Central clearing bank 41
3.2.4.5 Bank of rediscount and lender of last resort 42
3.2.4.6 Custodian of country’s gold reserves and foreign exchange reserves 42
3.2.4.7 Controller of money and credit 42
3.2.5 Departmental structure 43
3.3 Legislation applicable to banks 43
3.4 The Banks Act 44
3.4.1 Introduction 44
3.4.2 Scope of the Banks Act 45
3.4.3 Prudential Authority 45
3.4.4 Conducting “the business of a bank” 46
3.4.4.1 Definition of “deposit” and excluded payments 47
3.4.4.2 Definition of the “business of a bank” and excluded activities 49
3.4.5 Enforcement of the prohibition 57
3.4.5.1 Prudential Authority 57
3.4.5.2 Interdict 57
3.4.5.3 Powers of the Prudential Authority 57
3.4.5.4 Section 83(3)(b) 58
3.4.6 Registration of banks 58
3.4.6.1 Prescribed form 60
3.4.6.2 Conducting business 60
3.4.6.3 Companies Act 60
3.4.7 Name of a bank 60
3.5 Conclusion 61

LESSON 4: LEGAL ASPECTS OF FINANCIAL INCLUSION 63
4.1 INTRODUCTION 63
4.2 FINANCIAL INCLUSION DEFINED 64
4.3 DIMENSIONS OF FINANCIAL INCLUSION 64
4.3.1 Access and usage 65
4.3.1.1 Access 65

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4.3.1.2 Usage 65
4.3.2 Quality 66
4.4 SELECTED BARRIERS AND TRADE-OFFS TO
FINANCIAL INCLUSIONS 66
4.4.1 Categories of barriers to financial inclusion 66
4.4.2 Trade-offs between existing financial regulations and
financial inclusion 67
4.4.2.1 Trade-off between financial stability and financial inclusion 67
4.4.2.2 Trade-off between financial inclusion and maintaining
financial integrity 67
4.4.2.3 Trade-off between financial inclusion and consumer
protection in the financial sector 68
4.5 TRANSFORMATION OF THE FINANCIAL SECTOR
AND FINANCIAL INCLUSION IN SOUTH AFRICA 69
4.5.1 A brief overview 69
4.5.1.1 The business of banks and the member-based microfinance
institution 69
4.5.1.2 Stokvel as a financial institution for providing access to finance 70
4.5.2 Current bank accounts and barriers to banking for the poor 70
4.5.3 The provision of micro credits 71
4.5.3.1 The prevention of reckless credit and the affordability assessment 72
4.5.3.2 Interest rate caps 73
4.6 CONCLUSION 74

LESSON 5: THE BANK-CUSTOMER RELATIONSHIP 75
5.1 INTRODUCTION 75
5.2 THE NATURE OF THE BANK-CUSTOMER RELATIONSHIP 76
5.2.1 Mutuum 76
5.2.2 Deposit-taking 77
5.3 THE DIFFERENT RELATIONSHIPS BETWEEN BANKS
AND THEIR CUSTOMERS 78
5.3.1 Background 78
5.3.2 The relationship of debtor and creditor 79
5.4 THE BANK’S DUTY OF CARE 82
5.5 THE BANK’S DUTY OF CONFIDENTIALITY 83
5.5.1 Foundation 83
5.5.2 Common law 84
5.5.3 Statutory law 85
5.6 THE BANK AS OWNER OF MONIES DEPOSITED 86
5.6.1 Background 86
5.6.2 Limits 87
5.6.3 The meaning of ‘‘receipt’’ 87
5.6.4 Receipt for own use and benefit 87
5.6.5 Receipt as reduction of an overdraft 89
5.7 CONCLUSION 90

LESSON 6: THE BANK AS DEPOSITORY 91
6.1 INTRODUCTION 91
6.2 THE CONCEPT ‘‘DEPOSITUM’’ 92
6.3 SAFEKEEPING 92
6.4 THE BANK’S LIABILITY 96
6.5 MUTUUM 97
6.6 CONCLUSION 100

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