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The Reserve Bank

When the interest rates on your car loan or housing bond go up and down, that is because the Monetary Policy Committee of the South African Reserve Bank has decided to increase or decrease the interest rate on money that it has lent (or will lend) to South African banks, and who then lend money to the public.

The interest rates change for various econometric reasons – oil prices, exchange rate developments, changes in wages and productivity, credit extensions, and so on1 – but it all boils down to one essential premise. That is the protection of the value of South Africa’s currency in the interests of balanced and sustainable economic growth.

The Reserve Bank is, basically, the ‘central’ bank. It acts as the Government’s bank, and the bank for the banks we deal with. It issues all the bank notes and coins, it is the custodian of the country’s gold reserves and foreign currency reserves, and provides facilities for the clearing and settling of claims between commercial banks.2

The South African Reserve Bank Act 1999 consolidates all the laws relating to central banking and the monetary system. It falls under the authority of the Minister of Finance, but is administered, effectively, by a Board of Directors, at the head of which is the Governor of the Reserve Bank.

A. Forgery and defacing currency

  1. The following are all criminal offences:
    • forge, alter or issue any coins or a note of the bank (i.e. a banknote) or something purporting to be a banknote;3
    • put into circulation, tender or accept any note or coin which has been forged, altered or (unlawfully) issued, knowing it to be so;4
    • deface, soil or damage any banknote;
    • write or place any drawing on any banknote;
    • attach to any banknote anything in the nature of an advertisement;
    • deface or damage any coin which is legal tender;5 6
    • be found in possession of any bank or defective coin of the size, shape and metal composition of any coin whose production is authorised by the Act, without a satisfactory explanation.7

  2. It is an offence to engrave or mark upon any material whatsoever any words, etc. the print whereof resembles anything used upon any banknote or any coin which is legal tender.8

  3. It is an offence to use or knowingly have in your possession any material whatsoever upon which has been engraved or marked any such words, figures, letters, marks, lines or devices.9

  4. It is a crime to destroy, melt down, dissolve, break up or damage any coin.10

  5. It is a crime to remove any coin out of the Republic, or cause or permit it to be so removed, with the purpose of melting it down, etc.11

  6. It is also a crime to sell or dispose of any coin knowing or suspecting that it is to be dealt with in that manner.12

B. Vending machines

  1. If in a vending machine, or equipment which collects fares or tolls, you insert or use anything that is intended to pass for the coin or the token of value that the machine is designed to receive, it is a criminal offence.13

C. Gold coins

  1. It is a crime to sell, exchange or otherwise dispose of any metal reproduction of any gold coin (contemplated in schedule 2 of the Act).14

  2. It is a crime to use the word ‘Krugerrand’, ‘Natura’ or ‘Protea’ (or any derivative thereof, or any combination thereof with any other word) in the furtherance of the sale, exchange or disposal of such a reproduction - or, for that matter, of any metal article of commerce.15

D. The Mint

  1. If you without lawful authority or excuse remove from the premises where coins are manufactured (i.e. the Mint in Midrand) anything used in connection with the coining of coins, or any coin, or bullion, you commit an offence.16

E. Secrecy

  1. It is a criminal offence for any employee of the Reserve Bank, or any officer in the Department of Finance, to disclose any information relating to the Bank, its shareholders or its clients, or any information acquired in the course of his participation in activities of the Reserve Bank.17

  2. If any communication addressed by the Reserve Bank to any person (or vice versa) has been marked as confidential or secret, it is a crime to disclose any information contained in the communication.18 19

  1. www.resbank.co.za – ‘Meetings’. ↩

  2. See the address given by Mr TT Mboweni, then Governor of the SA Reserve Bank, on 14 March 2000 to the Pretoria Council for Businesswomen, published at www.bis.org - ‘The Role of the Reserve Bank in the South African Economy’ for a lucid and easily digested summation. ↩

  3. Section 34(1)a. ↩

  4. Section 34(1)b. ↩

  5. Basically, this is a coin in circulation in the Republic. One cent and two cent coins are still legal tender, because they have not been withdrawn from circulation although no more production (minting) of these coins occurred after 31 March 2002 – www.resbank.co.za ‘Old 1c and 2c coin’. ↩

  6. Section 34(1)f. ↩

  7. Section 34(1)h. ↩

  8. Section 34(1)c. ↩

  9. Section 34(1)d. ↩

  10. Section 34(1)k. ↩

  11. Section 34(1)k. ↩

  12. Section 34(1)k. ↩

  13. Section 34(1)h. ↩

  14. Section 34(1)j. ↩

  15. Section 34(1)j. ↩

  16. Section 34(1)g. ↩

  17. Section 33(1) read with section 34(1)e. ↩

  18. This does not apply if obliged by law, or if both the sender and recipient comment in writing. ↩

  19. Section 33(3) read with section 34(1)e. ↩

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