Mutual Banks Act, 1993 (Act No. 124 of 1993)

Regulations

Regulations relating to Mutual Banks

Chapter II : Risk-based Returns and Instructions, Directives and Interpretations relating to the completion thereof

19. Balance sheet and off-balance-sheet activities
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(1) The cost of funds in respect of a liability item identified in the statement shall be calculated on an annualized basis. (This implies expressing the applicable expense item appearing on the income statement as a percentage of the average daily balance for the month of the corresponding liability item and multiplying the result with the number of days in. a calendar year divided by the number of calendar days in the month to which the statement relates.)

 

(2) The gross yield in respect of an asset item identified in the statement shall be calculated on an annualized basis and before taxation on such income is taken into consideration.* (This implies expressing the applicable income item appearing on the income statement as a percentage of the average daily balance for the month of the corresponding asset item and multiplying the result with the number of days in a calendar year divided by the number of calendar days in the month to which the statement relates.)

 

* Refer in this regard to the directives and interpretations for the completion of line item 56 of the income statement- form DI 200.

 

(3) The income-statement item comparable to a particular balance-sheet item appears in the directives and interpretations relating to the income statement (regulation 20).

 

(4) Assets sold under repurchase agreements
(a) A mutual bank shall continue to reflect an asset sold in terms of a repurchase agreement as such an asset in its monthly balance sheet (form DI 100), at the value at which that asset appeared in the accounting records of the bank prior to the sale thereof.

 

(b) An asset referred to in subregulation (4)(a) and which is a liquid asset as defined in section 1 of the Act shall for the purposes of section 50(1) of the Act rank as a liquid asset in the hands of the mutual bank having possession thereof, but shall not be included by that mutual bank in its monthly balance sheet (form DI 100).

 

(c) All repurchase agreements concluded by mutual banks shall comply with the following requirements:
(i) no repurchase agreement shall be concluded by a mutual bank with a client thereof without such client's prior consent;
(ii) a mutual bank shall advise its client in writing of every repurchase agreement concluded between them;
(iii) all documentation, relating to repurchase agreements, furnished by a mutual bank to its clients, including letters of confirmation, statements of account and audit certificates, shall clearly identify the relevant transactions as repurchase agreements;
(iv) each transaction must be recorded in the accounting records of the mutual bank, including the client’s account in the books of the ‘mutual bank, and the client must be advised in writing of each transaction on his account with the mutual bank concerned; and
(v) the underlying asset of each repurchase agreement must at all times be separately identified physically and in the accounting records of the mutual bank.

 

(5)A mutual bank shall complete the forms DI 100 and DI 110 in accordance with such instructions or requirements as may be determined or directed in writing by the Authority.

[Regulation 19(5) substituted by section 4 of Notice No. 7414 of GG54593, dated 29 April 2026 - effective 1 May 2026]

 

Line item number

 

12

Loans received under repurchase agreements

The liability of a mutual bank, by virtue of a repurchase agreement entered into by the mutual bank with any other person, shall constitute a loan to the mutual bank, and the mutual bank shall bring the loan liability into account at the amount of the consideration received for the asset so sold.

 

22

Other liabilities and trade creditors, including impairments and tax liabilities

The following liabilities shall be included:

22.1Balances due to head office and branches in the Republic, that is where the net interbranch and head-office balances resulting from entries that originate or require response outside the head office or outside any particular branch are credit balances. A net debit balance shall be reported under asset item 74.
22.2A balance representing deferred income that cannot be deducted from the asset in question. (This item shall include suspense accounts arising from credit balances resulting from the revaluation of forward exchange contracts or other trading assets, but shall exclude unearned finance charges, accrued interest and rebates.)
22.3The gross amount of credit items on a deferred tax account. (Also refer to the directives concerning asset item 75.)
22.4The amounts reported as impairments under capital and reserves (item 23), firstly, in respect of the capital deficit of a foreign subsidiary and, secondly, in respect of all assets included in this statement representing impairments in terms of section 48(5)(a) of the Act.
22.5All provisions not included elsewhere in this statement.

 

37

Gold coin and bullion and non-RSA currency (cash) holdings

Gold coin and bullion shall be valued at the month-end rand price for gold established at the afternoon gold-price fixing on the London Gold Market and the closing middle rand/US dollar exchange rate on that day.

 

42

Instalment debtors, suspensive sales and leases

42.1The total of future instalments or rentals due and payable under instalment sale transactions and leasing transactions shall be included under this item.
42.2 The amounts reported shall be the full amount of the future rentals or instalments due and payable, less related unearned finance charges.
42.3If goods have been repossessed, their estimated net realisable value shall be included. under the item ‘other assets’ (item 74).
42.4 If retentions have been withheld from suppliers of goods that are the subject of agreements, such retentions shall be deducted from the amounts reported under this item only if a legal right so to withhold is embodied in the agreement. Where no such right exists, the amount withheld shall be included under the liability item ‘other funding liabilities’ (liability item 15).
42.5 Under this item shall also be included the amount of future rentals and instalments that are overdue as defined on form. DI 500 (credit risk), less related unearned finance charges.

 

49

Loans granted under resale agreements

An asset purchased by a mutual bank from any other person subject to a resale agreement shall be shown under this item as a loan granted by the mutual bank in an amount equal to the consideration paid for the asset so purchased. The asset so purchased shall not be included in the balance sheet of the reporting mutual bank.

 

53

Specific provisions

This item shall include specific provisions, as. defined in regulation 45, in respect of discounts, loans and advances relating to asset items 40 to 49, inclusive, and interest receivable credited to an interest: suspense account in respect of non-performing discounts, overdrafts and loans.

 

60

Listed equities and bank-related investments

60.1Shares in domestic and foreign subsidiary companies, joint ventures and associates

Include all investments in the shares of subsidiary companies and associates referred to in regulation 5(2)(b)(i) undertaking banking or other business. Shares in subsidiary companies whose main object is the holding of immovable property shall not be included under this item. Such investments shall be reported under ‘premises of bank’ (asset item 65) or under ‘other fixed property’ (asset item 66). Preference shares, where the substance of the underlying transaction is to provide credit facilities, shall be included under asset item 46.

60.2 Investments and interests of the reporting bank in the capital of a foreign branch or unincorporated undertaking

The funding of a foreign branch or unincorporated undertaking referred to in regulation 5(2)(b)(ii) by the reporting mutual bank shall be divided into a capital account and a current account in respect of such branch or undertaking. The amount allocated to the capital account is that amount which can be regarded as being permanent funding of the foreign branch or unincorporated undertaking and shall represent the capital of such branch or undertaking as envisaged in section 48(5)(a) of the Act. Such capital shall be included under this item and the balance, representing the current account, under asset item 48 (if a debit balance) or under liability item 10 (if a credit balance).

 

65

Premises of mutual bank

65.1 All land and buildings owned by the reporting mutual bank and used or intended to be used by it mainly for the purpose of the conduct of its business as a mutual bank, including official residences, shall be included under the item.
65.2Amounts relating to the capital cost of leasehold premises shall be included under this item.
65.3The amounts of shares in, or loans and advances to, subsidiary companies whose main object is the holding of fixed property that is used or intended to be used by the reporting mutual bank mainly for the purpose of the conduct of its business as a mutual bank shall also be included under this item.
65.4Amounts shall be stated at net book values.

 

66

Other fixed property

66.1 All investments in fixed property not used or intended to be used by the reporting mutual bank mainly for the purpose of the conduct of its business as a bank, shall be included under the item, including, inter alia—
66.1.1 shares in companies of which the main object is the acquisition and holding or development of immovable property other than business premises of the reporting mutual bank;
66.1.2 amounts owing to the reporting mutual bank in respect of immovable property sold by it under deed of sale.
66.2.The amounts of the investments referred to in paragraph 66.1 shall be stated at net book values.
66.3Assets bought in to protect an advance or investment and not yet disposed of, such as immovable property or companies of which the main object is the acquisition and holding or development of immovable property shall be included under line item number 74. Assets so bought in shall be valued at the lower of either cost or estimated net realisable value. After a lapse of five years, the asset bought in shall no longer be regarded as protecting an investment and must be reclassified as an investment.

 

69

Clients’ liabilities for acknowledgement of debt, per contra

The liabilities of clients in respect of all the outstanding instruments specified in line item numbers 18 to 21, which instruments have not been included under line item number 45 as having been discounted by the reporting mutual bank, but which have been discounted or rediscounted by another bank or have been sold, shall be reported as contra items under line item numbers 70 to 73 respectively.

 

74

Other assets (including remittances in transit and properties in possession)

74.1Balances due by head office and branches in the Republic

The net interbranch and head office debit balances, resulting from entries that originate or require response outside the head office or outside any particular branch shall be included under this item. A net credit balance shall be reported under liability item 22.

74.2Assets other than the foregoing

Postal and money orders, tax overpaid, services deposits and stamps, as well as all assets not specifically required to be shown elsewhere in form DI 100 shall be included under this item.

74.3Remittances in transit

The amounts of cheques or other orders to pay, drawn on one of a mutual bank’s branches in the Republic or on another bank or mutual bank in the Republic or on the Reserve Bank, and with which another such branch, bank or mutual bank in the Republic has credited a client or which it has paid out but with which the first-mentioned branch or bank, mutual bank or the Reserve Bank has not yet debited a client, as well as the amount of a warrant voucher that the reporting mutual bank has paid out but for which it has not yet received repayment from the Secretary to the Treasury, shall be included under this item.

Assets bought in to protect an investment

74.4Investments in shares of companies of which the main object is not the holding of fixed property, and which shares were bought in to protect an advance or an investment shall be included under this item. After a lapse of five years, the asset bought in shall no longer be regarded as protecting an investment and must be reclassified as an investment.

 

75
75.1This item shall include the gross amount of debit items on a deferred tax account.
75.2mutual bank shall provide the Authority at the time of compiling interim and annual financial statements with an analysis containing full details of each debit and credit item on a deferred tax account, separately.

 

[Deleted] Form DI100 and Form DI110 - Directives and interpretations for completion