PA to exempt payment activities from bank definition

The South African Reserve Bank's Prudential Authority (PA) has announced its intention to issue an Exemption Notice.

This notice will exempt specific payment activities within the national payment system (NPS) from being defined as 'the business of a bank' under the Banks Act, 1990.

This is a crucial step to broaden access for non-bank entities, which currently face limitations in offering services like money remittance or e-money issuance that involve pooling public funds, often requiring bank sponsorship.

The Exemption Notice complements the SARB's new activity-based Authorisation Framework, designed to enable non-banks to independently conduct these payment activities.

This comprehensive framework is anticipated to boost competition and financial inclusion, offering consumers more convenient, cost-effective, and innovative payment options.

The PA is now inviting public comments on both the draft Exemption Notice and the supporting Authorisation Framework, a necessary step before seeking final approval from the Minister of Finance and subsequent publication.

The Banks Act, 1990, mandates that only registered public companies can conduct banking business, though the PA, with ministerial approval, can exempt certain activities.

Currently, non-banks have limited access to the national payment system (NPS) for pooled-fund payment activities, often requiring bank sponsorship.

To modernise this, the SARB developed an activity-based Authorisation Framework.

This framework, supported by the Exemption Notice, will enable non-banks to operate independently, enhancing competition and financial inclusion.

The drafts underwent extensive stakeholder consultations, including two public rounds in March and November 2025, and workshops, leading to significant refinements.

The PA is now conducting its own public consultation, a statutory requirement before finalisation.