Financial Crime World

Here is the article in markdown format:

Banking Regulation in South Africa

=====================================

Overview of Banking Regulation

In South Africa, the banking sector is regulated by the South African Reserve Bank (SARB) through legislation, regulation, and guidelines. The SARB ensures that banks comply with international standards.

Key Legislation

  • The Financial Sector Regulation Act (FSRA) sets out the framework for banking regulation.
  • The FSRA requires banks to maintain adequate capital, liquidity, and risk management practices.
  • Banks must also comply with anti-money laundering and combating terrorism financing requirements.

Banking Supervision

The SARB’s Prudential Authority is responsible for supervising banks. Regular on-site inspections are conducted to ensure compliance with regulatory requirements.

Regulatory Requirements

  • Banks must submit regular reports to the Prudential Authority.
  • The Prudential Authority conducts regular audits and inspections of banks.

Resolution Regime

South Africa has a bank resolution regime in place to deal with failing banks. The regime allows the SARB to intervene and resolve banks that are failing or likely to fail.

Key Provisions

  • The regime provides for the resolution of banks in an orderly manner.
  • Depositors’ funds are protected up to ZAR100,000 per qualifying deposit.

Deposit Insurance

The Corporation for Deposit Insurance (CoDI) was established to protect depositors’ funds up to ZAR100,000 per qualifying deposit. CoDI will reimburse depositors for their covered deposit balance in case of a bank failure.

Key Features

  • Qualifying deposits exclude those held by financial institutions or individuals with multiple accounts.
  • Funding for the Deposit Insurance Fund (DIF) will come from a deposit insurance levy.

Depositor Protection Regime

The depositor protection regime is newly established and not all aspects have come into effect yet. The regime provides protection for qualifying deposits up to ZAR100,000 per depositor.

Key Provisions

  • Qualifying deposits are protected up to ZAR100,000 per depositor.
  • Depositors with multiple accounts are only protected up to the maximum amount.

Bank Secrecy

South African law requires banks to maintain confidentiality of customer information, except in certain circumstances. The Protection of Personal Information Act (POPIA) regulates the processing and sharing of personal information.

Key Provisions

  • Banks must keep customer information confidential.
  • POPIA regulates the processing and sharing of personal information.

Prudential Regime

South Africa has implemented Basel III risk-based capital regulations. Banks must develop comprehensive risk-management processes and board-approved policies and procedures to address risks.

Key Features

  • Banks must hold sufficient capital to meet regulatory requirements.
  • Risk management is a critical component of the prudential regime.