South African Reserve Bank's Prudential Authority exempts specified national payment system activities from the Banks Act definition of banking business

The South African Reserve Bank’s Prudential Authority has issued an exemption notice, approved by the Minister of Finance, designating specified payment activities in the national payment system as not constituting “the business of a bank” under the Banks Act, subject to conditions. The exemption is designed to allow these activities to be conducted under a Reserve Bank authorisation and oversight framework rather than requiring them to fall within the banking perimeter. The exempted activities are issuing electronic money or a store of value, issuing payment instruments, acquiring payment instructions, providing third-party payment services (as a beneficiary service provider or payer service provider), money remittance, clearing and settlement. Conditions include regulation, supervision and oversight under the National Payment System Act; requirements for integration into an existing payment clearing house or the establishment of a new one for open-loop activity; compliance with relevant directives, clearing rules, scheme rules and clearing and settlement timelines; registration of closed-loop payment systems and activities; and restrictions limiting the activity to payment purposes only, prohibiting credit and investment activity and prohibiting interest for clients. The notice will take effect on a date determined by the Reserve Bank, aligned to the implementation date of the authorisation, regulatory, supervisory, exit and oversight framework (including a prudential framework and customer-fund safeguards) to be developed after consultation with the Prudential Authority.