history of bankin in south africa in early development
South Africa's banking system
The South African banking system is well developed and effectively regulated, comprising a central bank, a few large, financially strong banks and investment institutions, [ and a number of smaller banks.
Many foreign banks and investment institutions have set up operations in South Africa over the past decade. The Banks Act is primarily based on similar
legislation in the United Kingdom, Australia and Canada.
Although no formal agreements have been concluded towards a consistent international position in the area of banking regulation, there have been amendments to exchange controls as well as financial market legislation, making South Africa an attractive investment prospect.
The National Payment System Act of 1998 was introduced to bring the South African financial settlement system in line with international practice on settlement systems and systematic risk management procedures. The Act confers greater powers and duties on the SA Reserve Bank in respect of providing clearing and settlement facilities.
The Payment Association of South Africa, under the supervision of the Reserve Bank, has facilitated the introduction of payment clearing house agreements. It has also introduced agreements pertaining to settlement, clearing and netting agreements, and rules to create certainty and reduce systemic and other risks in inter-bank settlement. These developments have brought South Africa in line with international inter-bank settlement practice.
Investment and merchant banking remains the most competitive front in the industry, while the country's "big four" banks - Absa, First National Bank, Standard Bank and Nedbank - continue to consolidate their grip on the retail market.
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