, lOMoARcPSD| 18998289
UNIVERSITY EXAMINATIONS
May/June 2025
CLA2602
COMMERCIAL LAW 2B
Marks:100
Duration: 4 Hours
First examiner: ADV. MP MAKAKABA
Second examiner: ADV. MD TUBA
This paper consists of 8 pages.
Instructions:
Please find attached hereto Invigilator App instruction- student User Guide and CLA2602 QR Code
The Invigilator App - QR Code and Student
Student User Guide - Instruction document-
INSTRUCTIONS FOR A TAKE-HOME EXAM ON MYEXAMS
PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY BEFORE ANSWERING THE
EXAMINATION QUESTIONS.
, lOMoARcPSD| 18998289
CONFIDENTIAL CLA2602
MAY/JUN 2025
1. The examination question paper counts 100 marks.
2. It consists of 5 SECTIONS. Answer ALL of the questions in these sections.
. SECTION A consists of questions on (PART A) BANKING REGULATIONS AND
(PART B) CONSUMER CREDIT
. SECTION B consists of questions on OTHER METHODS OF PAYMENT
. SECTION C consists of questions on THE LAW OF TRUSTS
. SECTION D consists of questions on THE LAW OF INSOLVENCY
. SECTION E consists of questions on THE LAW OF ADMINISTRATION OF ESTATES
3. The duration of the examination is 4 hours. Your answers must be submitted via the myExams
platform on 28 May 2025 on or before 12h00 (South African Standard Time).
4. This is an open-book examination. You may consult your prescribed study material during the
examination. While the examination is in progress, you are not allowed to consult another person
to assist you to answer any of the questions contained in this question paper. You may also not
assist another student in answering any of the questions contained in this question paper.
Page 2 of 8
Page 3 of 8
, SECTION A: PART A - BANKING REGULATIONS AND CONSUMER CREDIT
QUESTION 1
Briefly discuss the role of a bank as a loan intermediary in the South African
economy. (5)
A bank acts as a crucial loan intermediary, or financial intermediary, by channeling
funds from savers to borrowers, thereby facilitating economic activity. Its role can be
broken down as follows:
1. Mobilisation of Savings: Banks attract surplus funds from individuals, households, and
businesses in the form of deposits (e.g., savings accounts, fixed deposits). These
pooled funds represent the raw material for lending.
2. Credit Creation and Allocation: Instead of simply lending out deposited money, banks
create credit by lending a multiple of their core deposits (within the limits set by capital
adequacy and reserve requirements). They allocate this credit to various sectors of the
economy, including individuals for homes and cars (mortgages and vehicle finance),
and businesses for expansion and operations (corporate loans and overdrafts).
3. Risk Assessment and Management: Banks perform a critical function by
professionally assessing the creditworthiness of potential borrowers. They evaluate the
risk of default and price their loans (interest rates) accordingly. This helps to ensure that
funds are allocated to the most productive and creditworthy uses.
4. Maturity Transformation: Banks transform short-term liabilities (deposits that can be
withdrawn on demand or at short notice) into long-term assets (loans that are repaid
over years). This process is vital for long-term investment in the economy, which would
be difficult if borrowers had to find individuals willing to lend for matching long periods.
5. Economic Growth and Liquidity: By providing the necessary credit for consumption
and investment, banks stimulate economic growth, job creation, and development. They
also provide liquidity to the financial system, ensuring that economic agents have
access to funds when needed.
UNIVERSITY EXAMINATIONS
May/June 2025
CLA2602
COMMERCIAL LAW 2B
Marks:100
Duration: 4 Hours
First examiner: ADV. MP MAKAKABA
Second examiner: ADV. MD TUBA
This paper consists of 8 pages.
Instructions:
Please find attached hereto Invigilator App instruction- student User Guide and CLA2602 QR Code
The Invigilator App - QR Code and Student
Student User Guide - Instruction document-
INSTRUCTIONS FOR A TAKE-HOME EXAM ON MYEXAMS
PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY BEFORE ANSWERING THE
EXAMINATION QUESTIONS.
, lOMoARcPSD| 18998289
CONFIDENTIAL CLA2602
MAY/JUN 2025
1. The examination question paper counts 100 marks.
2. It consists of 5 SECTIONS. Answer ALL of the questions in these sections.
. SECTION A consists of questions on (PART A) BANKING REGULATIONS AND
(PART B) CONSUMER CREDIT
. SECTION B consists of questions on OTHER METHODS OF PAYMENT
. SECTION C consists of questions on THE LAW OF TRUSTS
. SECTION D consists of questions on THE LAW OF INSOLVENCY
. SECTION E consists of questions on THE LAW OF ADMINISTRATION OF ESTATES
3. The duration of the examination is 4 hours. Your answers must be submitted via the myExams
platform on 28 May 2025 on or before 12h00 (South African Standard Time).
4. This is an open-book examination. You may consult your prescribed study material during the
examination. While the examination is in progress, you are not allowed to consult another person
to assist you to answer any of the questions contained in this question paper. You may also not
assist another student in answering any of the questions contained in this question paper.
Page 2 of 8
Page 3 of 8
, SECTION A: PART A - BANKING REGULATIONS AND CONSUMER CREDIT
QUESTION 1
Briefly discuss the role of a bank as a loan intermediary in the South African
economy. (5)
A bank acts as a crucial loan intermediary, or financial intermediary, by channeling
funds from savers to borrowers, thereby facilitating economic activity. Its role can be
broken down as follows:
1. Mobilisation of Savings: Banks attract surplus funds from individuals, households, and
businesses in the form of deposits (e.g., savings accounts, fixed deposits). These
pooled funds represent the raw material for lending.
2. Credit Creation and Allocation: Instead of simply lending out deposited money, banks
create credit by lending a multiple of their core deposits (within the limits set by capital
adequacy and reserve requirements). They allocate this credit to various sectors of the
economy, including individuals for homes and cars (mortgages and vehicle finance),
and businesses for expansion and operations (corporate loans and overdrafts).
3. Risk Assessment and Management: Banks perform a critical function by
professionally assessing the creditworthiness of potential borrowers. They evaluate the
risk of default and price their loans (interest rates) accordingly. This helps to ensure that
funds are allocated to the most productive and creditworthy uses.
4. Maturity Transformation: Banks transform short-term liabilities (deposits that can be
withdrawn on demand or at short notice) into long-term assets (loans that are repaid
over years). This process is vital for long-term investment in the economy, which would
be difficult if borrowers had to find individuals willing to lend for matching long periods.
5. Economic Growth and Liquidity: By providing the necessary credit for consumption
and investment, banks stimulate economic growth, job creation, and development. They
also provide liquidity to the financial system, ensuring that economic agents have
access to funds when needed.
