Category Archives: Banking Law

Cryptocurrencies: An international and local perspective

Cryptocurrency, also known as ‘virtual currencies’ or ‘cryptographic money’ is a digital form of currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. Cryptocurrencies operate completely independently of a central bank. They are essentially a decentralised digital cash system.

The European Central Bank defines cryptocurrency as:

“a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a flat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically” 

See a diagram indicating the process underlying cryptocurrencies here... Read More

Banking Law: Amendments to the NCA and the impact of the Proof of Income Regulations

Credit providers were required to take reasonable steps to assess whether a consumer will be able to afford making payments, before entering into a credit agreement. The National Credit Amendment Act 19 of 2014(NCAA) containes Regulation 23A[1] which is the ‘criteria to conduct the affordability assessment’ and which sets out clear guidelines for credit providers to be applied when assessing a particular customer’s affordability.

Credit providers complied with the new regulation; most of the banks already had incorporated proof of income documentation as a standard component to their affordability assessment processes... Read More

Credit Law: Collecting prescribed debts to which the National Credit Act applies

Under the post-1994, democratic dispensation, courts have shown an increased tendency to interpret legislation from a pro-consumer stance. This has produced favourable results in that there has been a decrease in the number of one sided transactions being concluded between large corporations and unwitting consumers. However, the corollary of this is thousands of invalidated contracts and millions of Rands in written-off debts in circumstances where credit providers and companies that concluded agreements in good faith. This harsh commercial climate has placed a demand on attorneys that represent the corporates in question to be incredibly knowledgeable and highly skilled in drafting agreements and collecting debts that stem from the same... Read More

Banking Law: The legal relationship between a bank and its customers

The relationship between banker and customer is one of a contested nature comprising various legal duties, obligations, and customs.

These various obligations and customs came to afore in the matter between Standard Bank of SA Ltd vs. Sarwan (2002) 3 ALL SA 49 (W). The case commenced when Standard Bank of SA (“the Bank”) instituted action against Sarwan (“the Customer”) for R193 220.70, being the overdrawn balance on the Customer’s account held with the bank. It was common cause that the amount consisted out of a cheque in the amount of R180 000.00 deposited and credited to the Customer’s account where after she effected several withdrawals and transfers before the cheque was dishonoured resulting in the amount of the cheque being reversed and a debit reflecting on the Customer’s account... Read More

Shipping Law: The ship market and maritime finance in South Africa: An overview

The state of the ship market, maritime finance in South Africa and the effectiveness of our maritime laws in the protection afforded to financiers are the three pillars of our commercial maritime industry in South Africa. Steyn Botha evaluates the success of the South African Department of Transport in achieving its 1996 objectives of expanding this sector of the economy.

The South African economy and the economies of its landlocked neighbours are served by the six major ports on the South African coastline at Durban, Richards Bay, Port Elizabeth, East London, Cape Town and Saldanha... Read More

Case law: ABSA Bank Ltd v McCreath: protecting a party while under a “justifiable misapprehension” caused by another who requires such signature

The general rule of our law is that in signing a document, a person is taken to be bound by the ordinary meaning and effect of the words which appear over his signature.

There are exceptions, however, to protect someone signing under a justifiable misapprehension, caused by the other party requiring such signature, as to the effect of the document.

In this case the respondent and signatory of the documents argued that he was made to believe he was signing mere “standard terms and conditions” and was not advised the documents constituted a suretyship... Read More

Credit Amnesty: the New Regulations

There are 21 million credit active consumers in South Africa, of which 11 million are blacklisted at a credit bureau. As from the 1st of April 2014 an amendment to the National Credit Act 2005 will provide relief to consumers who are blacklisted and who are adversely affected by such blacklisting who have paid up the debt.

It is clear that the amendments to the National Credit Act 2005 in respect of credit amnesty have caused confusion, with some consumers believing a credit amnesty means you do not have to repay your debt... Read More

Fraud, Corruption, Theft And Suspicious Transactions – Your Obligation To Report

It is likely at one stage in the running and management of a business, it will experience and/or be affected by the above commercial crimes. Our law does provide businesses and private individuals with various civil and criminal remedies. However it also, in certain instances, places a legal duty to report certain crimes as is more fully referred to below.

In South African law fraud is commonly defined as the unlawful and intentional making of a misrepresentation which causes actual prejudice or which is potentially prejudicial to another... Read More

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