RETHINKING THE DEFINITION OF THE "BUSINESS OF BANKING" IN SOUTH AFRICA AGAINST THE BACKDROP OF REGISTRAR OF BANKS V NET INCOME SOLUTIONS

• Date: 16 August 2019
• Published date: 16 August 2019

RETHINKING THE DEFINITION

OF THE ‘BUSINESS OF BANKING’

IN SOUTH AFRICA AGAINST THE

BACKDROP OF REGISTRAR OF

BANKS V NET INCOME SOLUTIONS

[2013] ZAWCHC 92

H KAWADZA

Senior lecturer, School of Law, University of the Witwatersrand

Keywords: Bank, business of banking, customer, regulation,

supervision, intermediation, definition, investor.

ABSTRACT

The recent financial crisis has amplified calls for the effective

regulation of banks. However, an appreciation of bank regulation

necessitates an understanding of what a bank is. It is only when

that has been accomplished that resources can be channelled

towards the regulatory and supervisory objective of those

institutions. The major challenge, however, has been the growing

difficulty associated with defining what the business of banking

is. Statutory definitions have been too restrictive and have

confined banks to certain activities. Much as that can be justified

as necessary to prevent banks from engaging in other activities,

that constraint has had the potential of exposing banks to, among

other disadvantages, unfair competition especially given that the

activities which have traditionally been the preserve of banks are

now being undertaken by non-banking institutions.

I INTRODUCTION

While it is generally easy to describe non-banking institutions in

simple and straightforward terms (Renée Adams & Hamid Mehran ‘Is

corporate governance different for bank holding companies?’ (2003)

9 FRBNY Economic Policy Review 123; Jonathan R Macey & Maureen

O’Hara ‘The corporate governance of banks’ (2003) 9 FRBNY Economic

Policy Review 91), the same cannot be said of banks. To many people

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(2015) 1(1) JCCL&P 105

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