The banking statute: general

While the Basel Accord presents the broad outline of prudential requirements, it is individual countries that adopt and implement them, and they do so via the local banking statute and regulations under the statute. While the local banking statute provides a broad brush to local regulation, the regulations under the statute provide the details.

The banking statute of most countries is elaborate. In Box 1 we present the outline (chapter and section headings) of one such statute42 in order to indicate its multifaceted nature. The statute is enacted "To provide for the regulation and supervision of the business of public companies taking deposits from the public; and to provide for matters connected therewith."

BOX 1: CHAPTER AND SECTION HEADINGS OF A BANKING STATUTE CHAPTER I: INTERPRETATION AND APPLICATION OF ACT

1. Definitions

2. Exclusions from application of Act

CHAPTER II: ADMINISTRATION OF ACT

3. Office for Banks

4. Registrar and Deputy Registrar of Banks

5. Delegation of powers and assignment of functions by Registrar

6. Powers of inspection of, and guidelines by, Registrar

7. Furnishing of information by banks

8. Power of Registrar to extend certain periods

9. Appeal against decisions of Registrar

10. Annual report by Registrar

CHAPTER III: AUTHORIZATION TO ESTABLISH, AND REGISTRATION AND CANCELLATION OF REGISTRATION OF BANKS

11. Registration a prerequisite for conducting business of bank

12. Application for authorization to establish bank

13. Granting or refusal of application for authorization

14. Revocation of authorization

15. Formation of certain companies prohibited except with approval of Registrar

16. Application for registration as bank

17. Granting or refusal of application for registration

18. Conditions of registration 18A. Branches of foreign institutions

18B. Cancellation or suspension of authorization by Registrar and notice by Registrar of intention to cancel or suspend authorization

19. Repealed

20. Repealed

21. Untrue information in connection with applications

22. Use of name of bank

23. Cancellation or suspension of registration by Registrar

24. Notice by Registrar of intention to cancel or suspend registration

25. Cancellation or suspension of registration by court

26. Restriction by Registrar of activities of bank

27. Cancellation of registration at request of bank

28. Cancellation of registration upon winding-up

29. Withdrawal of suspension or restriction

30. Publication of information relating to banks and representative offices of foreign institutions

31. Date on which registration lapses

32. Repayment of deposits upon lapse of registration

33. Preregistration in terms of this Act

33A. Preregistration after commencement of Banks Amendment Act, 1994

34. Representative offices of foreign institutions

35. Annual license

CHAPTER IV: SHAREHOLDING IN, AND REGISTRATION OF CONTROLLING COMPANIES IN RESPECT OF, BANKS

36. Repealed

37. Permission for acquisition of shares in bank or controlling company

38. Registration of shares in name of nominees

39. Furnishing of information by shareholders

40. Absence of wrongful intent

41. Effects of registration of shares contrary to Act

42. Restriction of right to control bank

43. Application for registration as controlling company

44. Granting or refusal of application for registration as controlling company

45. Cancellation by Registrar of registration of controlling company

46. Cancellation by court of registration of controlling company

47. Cancellation of registration at request of controlling company

48. Lapse of registration of controlling company upon cancellation of registration of bank

49. Date on which registration of controlling company lapses

50. Investments by controlling companies

CHAPTER V: FUNCTIONING OF BANKS AND CONTROLLING COMPANIES WITH REFERENCE TO COMPANIES ACT

51. Application of Companies Act to banks and controlling companies

52. Subsidiaries, branch offices, other interests and representative offices of banks and controlling companies

53. Disclosure by banks and controlling companies of interest in subsidiaries, trusts and other undertakings

54. Compromises, amalgamations, arrangements and affected transactions

55. Reconstruction within group of companies

56. Alteration of memorandum of association or articles of association, and change of name

57. Alteration of memorandum of association or articles of association in accordance with direction of Registrar

58. Information regarding directors and officers

59. Returns regarding shareholders

60. Directors of bank or controlling company

61. Appointment of auditor

62. Appointment of auditor by Registrar

63. Functions of auditor in relation to Registrar

64. Audit committee

65. Forwarding of certain notices, reports, returns and financial statements to Registrar

66. Disclosure of issued share capital

67. Disclosure of names of certain shareholders

68. Special provisions relating to winding-up or judicial management of bank

69. Appointment of curator to bank

69A. Investigation of affairs of bank under curatorship

CHAPTER VI: PRUDENTIAL REQUIREMENTS

70. Minimum share capital and unimpaired reserve funds

70A. Minimum share capital and reserve funds in respect of banking group

71. Repealed

72. Minimum liquid assets

73. Large exposures

74. Failure or inability to comply with prudential requirements

75. Returns

CHAPTER VII: PROVISIONS RELATING TO ASPECTS OF THE CONDUCT OF THE BUSINESS OF A B

76. Restriction on investments in immovable property and shares, and on loans and advances to certain subsidiaries

77. Restriction on investments with, and loans and advances to, certain associates

78. Undesirable practices

79. Shares, debentures, negotiable certificates of deposit and share warrants

80. Limitation on certain activities of banks

CHAPTER VIII: CONTROL OF CERTAIN ACTIVITIES OF UNREGISTERED PERSONS

81. Order prohibiting anticipated or actual contraventions of certain provisions of Act

82. Registrar's power to exact information from unregistered persons

83. Repayment of money unlawfully obtained

84. Management and control of repayment of money unlawfully obtained

CHAPTER IX: GENERAL PROVISIONS

85. Certification of returns and other documents

86. Inspection, copies and keeping of documents

87. Minors and married women as depositors

88. Limitation of liability

89. Furnishing of information by Registrar

90. Regulations

91. Offences and penalties

92. Review of Act

93. Interpretation of certain references in existing laws and in other documents

94. Amendment of section 3 of Act 61 of 1973, as amended by section 106 of Act 82 of 1986

95. Repeal of laws, and savings

96. Short title