The definition of ‘the business of a bank’ is any of the 5 activities:

• Taking deposits from the general public

• Utilising money deposited (or interest/income earned), e.g granting loans,
investing. financing
• Soliciting/Advertising for deposits
• Concluding "repurchase agreements" as a business
• Any other activity declared by Registrar to be business of bank ( after consulting
the Governor of the Reserve Bank) by a notice in the Government Gazette.
6 activities excluded:
1. The acceptance of a deposit by a person who does not purport to accept deposits
on a regular basis and who has not advertised for or solicited such deposits (To
qualify for this exclusion, the person concerned must not at any time hold
deposits from more than 20 persons or deposits amounting in the aggregate to
more than R500 000.)
2. The borrowing of money from its members by a co-operative, subject to such
conditions as may be prescribed.
3. An activity of a public sector, governmental or other institution, or of a person or
category of persons designated by the registrar with the approval of the Minister,
by notice in the Gazette, provided such activity is performed in accordance with
such conditions as the registrar may determine in the relevant notice, with the
approval of the Minister.
4. An activity contemplated in paragraphs (a), (b) or (c) of the definition of ‘the
business of a bank’ above, which is performed by any institution registered or
established in terms of any Act of Parliament and designated by the Minister by
notice in the Gazette, or performed in terms of any scheme authorised by, and
conducted in accordance with the provisions of, any other Act of Parliament and
so designated by the Minister.
5. The effecting or implementation, subject to any other Act and the conditions
prescribed by the registrar, if any, of a money-lending transaction between a
lender and a bank as borrower, through the intermediation of an agent, in which
the money to be lent is entrusted by the lender to the agent in terms of a written
contract of agency.
6. The following activities of mandatories, which are natural or juristic
persons registered in terms of any other Act of Parliament and have been
designated by the registrar by notice in the Gazette:
(i) the acceptance of money from the mandator in terms of a prescribed contract of
mandate for purposes of effecting a moneylending transaction with a bank; and
(ii) the depositing of such money into an account maintained by the mandatory with a
bank, irrespective of whether or not such money is deposited together with money so
accepted by the mandatory from other mandators.
ABC Limited can carry on the ‘business’ of deposit-taking without soliciting or
advertising for deposits.
Therefore, ABC Limited does not have to register as a bank in terms of the Banks
Act, considering that they do not purport to accept deposits on a regular basis and
who has not advertised for or solicited such deposits and they take deposits of less
than R500 000, they take R35 000of which amounts to R490 000.
They are currently holding deposits for 14 people which is less than 20.
Feedback
You need to have a look at the following definitions to answer the question:
1. Business of a bank
2. Deposit
If they are not conducting the business of a bank, they do not have to register as a
bank.
Answer text Question 6
Feedback: Duty of secrecy
In the context of South African law, banks hold a duty of confidentiality towards their
customers. This duty is deeply entrenched in common law and is also underpinned
by statutory provisions like the Protection of Personal Information Act (POPIA).
Duty of Secrecy: A bank's duty of confidentiality means that they are legally obliged
not to disclose any information regarding a customer's account without the explicit
consent of the customer, unless required by law. This duty is not only applicable
during the duration of the customer-bank relationship but also continues after the
relationship has ended.
Access by Joe: Given the above, Sophie can be assured that Joe will not be
granted access to her bank account or any information related to it merely on his
request. Banks, owing to their duty of confidentiality, will not release such information
without Sophie's explicit permission.
Exceptions: However, there are certain circumstances where the duty of
confidentiality can be overridden. These situations include, but are not limited to:
• If the bank is legally compelled by a court order.
• If there's a public duty to disclose the information.
• If the bank has a legitimate interest in the disclosure, such as to recover a debt.
• If Sophie has given explicit consent.
But in the context provided, it seems improbable that Joe would be able to access
Sophie's bank details unless one of the above exceptions applies.
Answer text Question 7
As far as the bank’s deposit-taking and lending activities are concerned, the
relationship between the bank and its customer is not a fiduciary one but rather one
of debtor and creditor. The debtor-creditor classification, however, does not account
for all aspects of the bank-customer relationship. In certain situations the bank may
owe a fiduciary duty towards its customer and is, therefore, obliged to act in good
faith. Generally speaking, the existence of a fiduciary duty and its nature and extent
are ‘questions of fact to be adduced from a thorough consideration of the substance
of the relationship and any relevant circumstances which affect [its] operation’
Feedback
Banks' Duty to Act in Good Faith Towards Its Customer in South African Law
In South African law, the relationship between a bank and its customer is founded
upon the principles of contract and the common law. At the heart of this relationship
is the principle of bona fides, or good faith, which obliges parties in a contract to act
honestly and fairly towards one another.
Nature of the Duty in Banking Relationships
The fiduciary relationship between the bank and its customer mandates the bank to
act in the utmost good faith. This implies that banks are expected not only to refrain
from acting in a manner that would be detrimental to the interests of their customers,
but also to proactively safeguard those interests where necessary.
Parameters of Good Faith in Banking Relationships
Confidentiality: One of the foremost obligations for banks in their duty of good faith
is to maintain the confidentiality of their customers' accounts and personal
information. This duty is only subject to limited exceptions, such as instances where
there is a legal requirement to disclose certain information.
Full Disclosure: Banks are obligated to provide their customers with all the
necessary information regarding the services they render, especially in terms of the
fees and costs associated with these services. This ensures that customers can
make informed decisions.
Fair Treatment: It's imperative for banks to treat their customers fairly, be it in terms
of providing services, resolving disputes, or handling complaints. This entails not
acting arbitrarily or prejudicially against a customer.
Avoidance of Conflict of Interest: Banks should avoid situations where there might
be a conflict between their own interests and those of their customers. In cases
where such conflicts do arise, the bank's duty is to act in the best interests of the
customer.
Adherence to Regulatory and Statutory Mandates: The bank's duty of good faith
is also contextualised by various statutory and regulatory provisions. For example,
the National Credit Act 34 of 2005 requires banks to lend responsibly and not to
extend credit to consumers who would be over-indebted as a result.
Remedies for Breach
If a bank breaches its duty to act in good faith, the customer has several potential
remedies. This can include instituting a claim for damages or, in certain
circumstances, seeking interdictory relief. Additionally, the bank might face regulatory
or statutory sanctions if it fails to uphold its duties under the relevant laws and
regulations.
The Evolution of the Principle of Good Faith
Over time, the principle of good faith in banking relationships has evolved, especially
with the introduction of consumer protection laws and banking regulations. These
changes are aimed at ensuring that the power dynamics between banks and
customers are more balanced, and that customers are adequately protected against
potential abuses.

Conclusion
In South African law, the duty of banks to act in good faith towards their customers is
a paramount principle, reinforced both by common law and statutory provisions. It
entails an obligation on the part of banks to act honestly, fairly, and with the best
interests of the customer in mind. Any deviation from this standard might have legal
ramifications for the bank in question. As the financial sector evolves and becomes
more complex, the duty of good faith remains a cornerstone, ensuring that the
relationship between banks and their customers is rooted in trust and fairness.

Sam has two accounts with Smart Bank: · A loan from 2020 which has a debit
balance of R100 000 (with an interest rate of 15%) · A separate loan from 2021
which has a debit balance of R60 000 (with an interest rate of 21%). Sam wins R50
000 at a casino and decides it would be good to pay back some of her debt. She
does an EFT to Smart Bank for R50 000 with a note stating: to be used for the
account of Sam Smith.
Using the appropriate rules, explain how Smart Bank Limited should allocate the
payment to her two accounts?
The residual appropriation rules would apply to this scenario.
Should there be no prior arrangement between the parties or an allocation by either
party payment is appropriated according to a set of residual rules:
Payment is first applied to the most onerous debt i.e. the debt which the debtor has
the most interest in discharging.
If the debts are equally onerous, the payment is appropriated to the debts in
chronological order starting with the oldest.
If the debts are equally old, the payment settles the debt proportionately.
The most onerous debt for Sam is the loan from 2021 because it has a higher
interest rate than the loan from 2020 therefore the payment of R50 000 will be
allocated to the loan from 2021 first.
Payment-related Concepts
3.1. Activity
Since the start of Covid-19, Mary has been battling to make her monthly payments
on her car. She is in danger of having her car repossessed. Her sister, Tanya
decides to lend a helping hand and approaches New Bank (Pty) Limited directly to
pay the outstanding amount
May New Bank (Pty) Limited refuse payment from Tanya as she is not the debtor in
this instance? Motivate your answer with reference to the relevant common law
position.
Payment of a monetary debt involves no delectus personae - it may be made by the
debtor's agent, a surety for the debtor or an independent third person - in this case,
Tanya is the third person Tanya (the third person) may make payment without the
knowledge or consent of Mary (the debtor), and even against her will.
The creditor may not refuse the tender of payment on the basis that it comes from
someone other than the debtor.
For Tanya (the third person) to discharge the obligation, she must make it clear to
the creditor that she is paying for or in the name of Mary (the debtor) and payment
must be made unconditionally. Therefore, New Bank may not refuse the payment
from Tanya.
Under the Bills of Exchange Act (BEA), several key legal principles and
provisions apply to this scenario involving the post-dated cheque issued by
John:
Definition and Function of a Cheque:
According to the BEA, a cheque is a bill drawn on a bank and payable on demand.
Despite this, it can be post-dated, meaning it specifies a future date for payment.
The post-dating itself does not invalidate the cheque (Section 71(1)).
Bank's Responsibility with Post-Dated Cheques:
A bank is generally not obligated to honor a post-dated cheque before the date
specified on it. If a bank processes a post-dated cheque before its due date, it does
so at its own risk (Section 71). In this case, the bank processed the cheque dated
June 15, 2024, on June 2, 2024, which constitutes premature action.
Legal Implications for the Bank:
By processing the cheque before its due date, the bank acted contrary to the
conditions under which the cheque was issued. The BEA implies that banks must
respect the date on a cheque, and failing to do so could lead to liability for any
resulting financial loss.
John's Remedies:
Claim for Reimbursement: John can request the bank to reverse the transaction,
crediting his account with the R50,000 debited prematurely. The bank, having paid
the cheque at its own risk, may not be entitled to debit John’s account for a cheque
that should not have been processed yet.
Damages: If the premature debiting caused any financial harm to John, such as
overdraft fees or penalties, he could potentially claim damages from the bank for
failing to adhere to the post-dating.
Legal Action: If the bank refuses to rectify the issue, John could seek legal recourse,
potentially suing the bank for breach of its obligations under the BEA. The court may
order the bank to reimburse John and compensate for any consequential losses.
Bank's Defenses:
The bank might argue that the cheque, once deposited, became an instrument
payable on demand and that processing it was a mistake. However, this does not
absolve them of responsibility, given the clear post-date.
Holder’s Rights:
Sarah, as the payee, was entitled to deposit the cheque at any time. The
responsibility for handling the post-dated cheque correctly lies with the bank, not with
Sarah.
E-money
E-money, in the context of South African banking law, refers to electronic money,
which represents a digital equivalent of fiat currency, stored electronically or
magnetically, used as a medium of exchange for the execution of payment
transactions.
The South African Reserve Bank (SARB) has taken a cautiously proactive stance on
E-money, acknowledging its potential benefits for the economy, especially in
enhancing financial inclusion. In its position, the SARB emphasises that E-money
providers must be registered and comply with the regulatory framework set out for
payment service providers, which ensures the safeguarding of consumer interests,
the stability of the financial system, and the mitigation of potential risks associated
with electronic funds. This stance underscores the SARB's commitment to nurturing
innovation in the financial sector while maintaining a sound and secure banking
environment.
Sim-Swap
A sim-swap, in the realm of telecommunications and cyber-security, refers to the
process wherein an individual's mobile number is transferred to a new SIM card
without their knowledge or consent.
This is usually orchestrated by fraudsters seeking to gain unauthorised access to a
person's personal information, bank accounts, or other sensitive data. The process
typically commences with the perpetrator gathering personal details about the victim,
which can be procured through methods like phishing or data breaches. Armed with
this information, the fraudster then impersonates the victim, contacting the mobile
service provider to request a 'SIM replacement'. Once the swap is executed, the
victim's mobile device loses connectivity, while the fraudster gains control of the
mobile number, potentially receiving confidential SMS notifications, OTPs (One-Time
Pins), and thereby breaching accounts linked to that number.