FIRST-TIER BANKS SECOND-TIER BANKS THIRD-TIER BANKS

Include: Commercial or Include mutual banks, the Include a wide range of

retail banks, investment PostBank of South Africa formal and informal
banks, the Development and co-operative banks institutions that provide
Bank of Southern Africa ‘bank-like’ services
Require registration as a Require registration as a Do not require registration
bank bank as a bank
Subject to strict Subject to strict Not subject to strict
registration and prudential registration and prudential registration and prudential
requirements requirements requirements
Examples include
community banks, village
banks, mobile banking
services and banks that
will operate in terms of
the proposed Dedicated
Banks Bill
Creation of aims to Creation of aims to
increase access to increase access to
participation in the participation in the
financial sector by the financial sector by the
‘unbanked’ ‘unbanked’
No distinction drawn Mutual banks: Cater for Village bank: Organised
between commercial and low-income segment of and owned by its
retail banks. Commercial market. Regulated by the members. Objectives:
or retail bank isa financial Mutual Banks Act. Provide appropriate
institution that provides Juristic person registered financial services at local
banking services for their as a mutual bank, and level and to provide link to
customers, including whose members qualify first-tier bank. Village
businesses, organisations as such by virtue of being bank will encourage its
and individuals. shareholders and being members to save, and the
Banking services include entitled to participate in collective savings are
the offering of current, the exercising of control in deposited with an
deposit and savings a general meeting of the ordinary commercial
accounts as well as bank. Clients are also bank.
providing loans to their shareholders.
customers. Banks fulfil an Clients participate in day-
important role as to-day management of
depositors and/or lenders. the bank
Usually offer payment
intermediary services.
Commercial bank’s main
business is deposit-
taking, making loans and
providing payment
intermediary services.
Examples of commercial Examples of mutual Stokvel: Generic name for
banks: banks in South Africa: wide range of credit and
ABSA VBS Mutual Bank savings associations
FNB GBS Mutual Bank which one encounters in
 Nedbank Finbound Mutual Bank disadvantaged
Standard Bank Bank Zero communities. Many
Capitec stokvels provide banking-
type services, including
savings and credit
services.
Excluded from Banks Act.
No legislation that
regulates stokvels
specifically.
Investment Bank: Post Bank: Regulated by Mobile banking services.
Financial institution that the South African No legislation that
assists individuals, Postbank Limited Act. governs mobile banking
companies and Savings financial services. Falls under e-
governments in raising institution that operates banking Legislation that
capital by underwriting as a division of the South applies to e-banking:
and/or acting as the African Post Office. Acts South African Reserve
client’s agent in the as a deposit-taking Bank Act
issuance of securities. institution. National Payment System
They do not take Act
deposits. Banks Act
Exchange Control
Regulations
FICA
South African Reserve
Bank Position Paper on
Electronic money
The Land and Agricultural Co-operative banks
Bank: Government-owned regulated by the Co-
development bank. Main operative Banks Act. A
objective is to promote bank whose members are
and finance development of similar occupation or
in the agricultural sector profession or who are
of the economy of the employed by a common
country. Governed by the employer or who are
Land and Agricultural employed within the same
Development Bank Act. business district; or have
common membership in
an association or
organisation including a
business, religious, social,
co-operative, labour or
educational group or
reside within the same
defined community or
geographical area. Takes
deposits; has 200 or more
members and holds
deposits of members to
the value of R1 million or
 more
Development Bank of
Southern Africa:
Development Finance
Institution wholly owned
by the South African
government. Regulated
by the Development Bank
of Southern Africa Act.
Main objectives are the
promotion of economic
development and growth,
human resource
development, institutional
capacity building, and the
support of development
projects in the region.