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Banks Act, 1990 (Act No. 94 of 1990)

Chapter VI : Prudential Requirements

70. Minimum share capital and unimpaired reserve funds

 

(1) [Section 70(1) deleted by section 20(a) of Act No. 20 of 2007]

 

(2)
(a) A bank of which the business does not include trading in financial instruments shall manage its affairs in such a way that, subject to the provisions of paragraph (b), the sum of its common equity tier 1 capital, additional tier 1 capital and tier 2 capital and its common equity tier 1 unimpaired reserve funds, additional tier 1 unimpaired reserve funds and tier 2 unimpaired reserve funds in the Republic does not at any time amount to less than the greater of—

[Words preceding section 70(2)(a)(i) substituted by section 38(a) of Act No. 22 of 2013]

(i) R250 000 000 or, in the case of such a bank which immediately prior to the date of commencement of this Act was registered as a banking institution or a building society under a law repealed by this Act, R1 000 000; or
(ii) an amount which represents a prescribed percentage of the sum of amounts relating to the different categories of assets and other risk exposures and calculated in such a manner as may be prescribed.
(b) Notwithstanding the provisions of paragraph (a)—
(i) the sum of the bank's common equity tier 1 capital and common equity tier 1 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2)(b)(i)(aa) substituted by section 38(b) of Act No. 22 of 2013]

(aa) taken in account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed; and
(ii) the sum of the bank's additional tier 1 capital and additional tier 1 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2)(b)(ii)(aa) substituted by section 38(c) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed:

[Proviso to section 70(2)(b)(ii) deleted by section 38(d) of Act No. 22 of 2013]

(iii) the sum of the bank's tier 2 capital and tier 2 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—
(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed.

[Section 70(2)(b)(iii) inserted by section 38(e) of Act No. 22 of 2013]

[Section 70(2) substituted by section 20(b) of Act No. 20 of 2007]

 

(2A)
(a) A bank of which the business consists solely of trading in financial instruments shall manage its affairs in such a way that, subject to the provisions of paragraph (b), the sum of its common equity tier 1 capital, additional tier 1 capital and tier 2 capital, and its common equity tier 1 unimpaired reserve funds, additional tier 1 unimpaired reserve funds and tier 2 unimpaired reserve funds in the Republic does not at any time amount to less than the greater of—

[Words preceding section 70(2A)(a)(i) substituted by section 38(f) of Act No. 22 of 2013]

(i) R250 000 000; or
(ii) an amount which represents a prescribed percentage of the sum of amounts relating to the different categories of assets and other risk exposures and calculated in such a manner as may be prescribed.
(b) Notwithstanding the provisions of paragraph (a)—
(i) the sum of the bank's common equity tier 1 capital and common equity tier 1 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2A)(b)(i)(aa) substituted by section 38(g) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed;
(ii) the sum of the bank's additional tier 1 capital and additional tier 1 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2A)(b)(ii)(aa) substituted by section 38(h) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed:

[Proviso to section 70(2A)(b)(ii) deleted by section 38(i) of Act No. 22 of 2013]

(iii) the sum of a bank's tier 2 capital and tier 2 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2A)(b)(iii)(aa) substituted by section 38(j) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed:

[Proviso to section 70(2A)(b)(iii) deleted by section 38(k) of Act No. 22 of 2013]

(iv) the total amount of allocated and qualifying common equity tier 1 capital, allocated and qualifying common equity tier 1 unimpaired reserve funds, allocated and qualifying additional tier 1 capital, allocated and qualifying additional tier 1 unimpaired reserve funds, allocated and qualifying tier 2 capital and allocated and qualifying tier 2 unimpaired reserve funds shall be determined as prescribed.

[Section 70(2A)(b)(iv) substituted by section 38(l) of Act No. 22 of 2013]

[Section 70(2A) substituted by section 20(c) of Act No. 20 of 2007]

 

(2B)
(a) A bank of which the business includes trading in financial instruments shall manage its affairs in such a way that, subject to the provisions of paragraph (b), the sum of its common equity tier 1 capital, additional tier 1 capital and tier 2 capital and its common equity tier 1 unimpaired reserve funds, additional tier 1 unimpaired reserve funds and tier 2 unimpaired reserve funds in the Republic does not at any time amount to less than the greater of—

[Words preceding section 70(2B)(a)(i) substituted by section 38(m) of Act No. 22 of 2013]

(i) R250 000 000; or
(ii) an amount which represents a prescribed percentage of the sum of amounts relating to the different categories of assets and other risk exposures and calculated in such a manner as may be prescribed.
(b) Notwithstanding the provisions of paragraph (a)—
(i) the sum of the bank's common equity tier 1 capital and common equity tier 1 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2B)(b)(i)(aa) substituted by section 38(n) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed; and
(ii) the sum of the bank's additional tier 1 capital and additional tier 1 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2B)(b)(ii)(aa) substituted by section 38(o) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed:

[Proviso to section 70(2B)(b)(ii) deleted by section 38(p) of Act No. 22 of 2013]

(iii) the sum of a bank's tier 2 capital and tier 2 unimpaired reserve funds shall, in the calculation of the aggregate amount which the bank is in terms of paragraph (a) required to maintain, be—

[Words preceding section 70(2B)(b)(iii)(aa) substituted by section 38(q) of Act No. 22 of 2013]

(aa) taken into account to an amount as may be prescribed; and
(bb) calculated by deducting from the amount thereof such amounts as may be prescribed:

[Proviso to section 70(2B)(b) (iii) deleted by section 38(r) of Act No. 22 of 2013]

(iv) the total amount of allocated and qualifying common equity tier 1 capital, allocated and qualifying common equity tier 1 unimpaired reserve funds, allocated and qualifying additional tier 1 capital, allocated and qualifying additional tier 1 unimpaired reserve funds, allocated and qualifying tier 2 capital and allocated and qualifying tier 2 unimpaired reserve funds shall be determined as prescribed.

[Section 70(2B)(b)(iv) substituted by section 38(s) of Act No. 22 of 2013]

[Section 70(2B) substituted by section 20(d) of Act No. 20 of 2007]

 

(3) [Section 70(3) deleted by section 12(d) of Act No. 36 of 2000]

 

(4) [Section 70(4) deleted by section 45(e) of Act No. 26 of 1994]

 

(5) [Section 70(5) deleted by section 12(d) of Act No. 36 of 2000]

 

(6) [Section 70(6) deleted by section 45(h) of Act No. 26 of 1994]

 

(7) [Section 70(7) deleted by section 45(h) of Act No. 26 of 1994]