The SA Banking System

Question 1

Briefly discuss the Role of the following pieces of legislation in banking law: Consumer Protection Act and National Credit Act.

Answer 1

The Consumer Protection Act (CPA) and the National Credit Act (NCA) are two important pieces of legislation in South African banking law.

The CPA protects consumers from unfair and deceptive trade practices. It applies to all businesses that sell goods or services to consumers, including banks. The CPA gives consumers a number of rights, including the right to:

• Information about the goods or services they are buying
• Choose the goods or services they want to buy
• Fair and reasonable terms and conditions
• Safe and reliable goods or services
• Redress if they are not satisfied with the goods or services they have received

The NCA regulates the credit industry in South Africa. It applies to all businesses that provide credit to consumers, including banks. The NCA protects consumers from irresponsible lending and unfair credit practices. It gives consumers a number of rights, including the right to:

• Apply for credit
• Be informed of the terms and conditions of a credit agreement before they sign it
• Be treated fairly and honestly
• Have their personal information protected

The CPA and the NCA play an important role in protecting consumers who use banking services. They help to ensure that consumers are treated fairly and that they understand the terms and conditions of the products and services they are using.

Here are some specific examples of how the CPA and NCA protect consumers in banking:

• The CPA prohibits banks from engaging in misleading or deceptive advertising practices.
• The NCA requires banks to assess a consumer’s affordability before granting them credit.
• The CPA gives consumers the right to cancel a credit agreement within 5 business days of signing it.
• The NCA prohibits banks from charging excessive interest rates or fees.
• The CPA gives consumers the right to dispute any charges on their bank account that they believe are incorrect.
• The NCA gives consumers the right to debt counselling if they are struggling to repay their debts.

Overall, the CPA and NCA play an important role in ensuring that consumers are treated fairly and that they have access to safe and reliable banking services.

Question 2

In recent years, what significant changes has the SA national banking sector undergone?

Answer 2

Changes in the regulatory environment

Question 3

What Act started the regulatory changes in the SA banking sector in 1990?

Answer 3

The Banks Act

Question 4

How is the banking environment in SA generally perceived?

Answer 4

Sound and stable

Question 5

What is not a type of bank in SA?

Answer 5

Online-only banks

Question 6

Which department in SARB is responsible for bank regulation and supervision in SA?

Answer 6

Bank Supervision Department

Question 7

What primary role does the National Payment System (NPS) of SARB play?

Answer 7

Inter-bank settlement service

Question 8

What is the main purpose of the Banks Act in regulating the SA banking sector?

Answer 8

Protecting the public against bank malpractices

Question 9

What is not a power of the SARB?

Answer 9

Establishing a national bank

Question 10

Under the National Credit Act, when must a person apply to be registered as a credit provider?