The text discusses the relationship between formal financial institutions, especially banks, and stokvels (informal savings groups). It highlights that the Minister of Finance has exempted stokvels from the Banks Act, indicating potential overlap in their activities. The regulation specifies that certain activities, particularly those that occur among members with a "common bond," are not considered part of "the business of a bank." This definition categorically excludes stokvels and similar groups from needing to register as banks. The regulation includes definitions, notably explaining "common bond" among various cooperative financial entities, but explicitly states that stokvels are not included in this classification.
summarise:
products offered by some formal financial institutions in general, [150] and banking institutions in particular. [151] This resemblance is further indirectly enhanced by the fact that the Minister of Finance has by regulation expressly exempted stokvels from the operation of the Banks Act. [152] The exclusion of their activities from the scope of the phrase ‘the business of a bank’ is in itself a strong indication of the possibility of an overlap between the activities of stokvels and banks. The Minister is empowered to designate certain activities as activities which do not fall within the ambit of the phrase ‘the business of a bank’. From the wording of the regulation it is clear that ‘the activities of a group of persons between the members of which exists a common bond’ do not fall within the meaning of ‘the business of a bank’. From the wording of the regulation it is further clear that the intention is to exclude the activities of stokvels, among other groups, from the operation of the Banks Act. [153]
The Government Notice that contains the regulation under discussion is accompanied by a schedule comprising five paragraphs. Paragraph 1 gives a number of word definitions, including a detailed definition of ‘common bond’. It provides, inter alia, that a ‘common bond’ exists between members of a financial co-operative, financial services co-operative, credit union or savings and credit co-operative, whose membership comprises persons who are employed by a common employer or who are employed within the same business district; or members who have common membership in an association including religious, social, co-operative, labour or educational groups; or members who reside within the same defined community. Paragraph 1(c) of the Notice specifically excludes stokvels from the definition of ‘the business of a bank’ and hence, from registration as a bank in terms of the Banks Act.
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