Prudential Authority Proposes 'Business of a Bank' Exemptions for Non-Banks

Brought to you by SA Legal Academy: The Prudential Authority has released a draft directive proposing to exempt specific payment activities from the definition of the “business of a bank” under the Banks Act, No. 94 of 1990.

The draft directive specifically targets payment activities that involve the pooling of funds from the public. Once finalised and implemented, the directive will allow non-bank entities to independently conduct these specific payment activities, which would otherwise require a banking licence under the current legislative framework.

This regulatory shift aligns with the South African Reserve Bank’s (SARB) broader payment activities regulatory framework review and modernisation process. A key component of this modernisation is an upcoming authorisation framework, which is currently subject to a separate consultation process.

Interested parties and stakeholders are invited to submit their written inputs and comments on the draft directive to the Prudential Authority. The deadline for submissions is 15 June 2026.

What this means for you, your business, or your clients

• For yourself: No direct individual compliance obligations; however, professional advisors must familiarise themselves with the changing regulatory boundary between banks and non-bank financial institutions.
• For your business: Compliance and legal practices should review their service offerings to assist fintech and payment clients in navigating the transition to the new independent payment authorisation framework.
• For your clients: Non-bank payment service providers and fintech companies can prepare to independently pool public funds for specific payment activities without the costly overhead of registering as a bank, subject to meeting the finalised authorisation criteria.

Originally published at https://legalacademy.co.za/news/read/financial-sector-input-sought-on-business-of-a-bank-activity-exemption-proposals