Mutual Banks Act, 1993 (Act No. 124 of 1993)RegulationsRegulations relating to Mutual BanksChapter II : Risk-based Returns and Instructions, Directives and Interpretations relating to the completion thereof15. Set-off |
| (1) | Where a client maintains both debit and credit balances with a mutual bank, it may be permissible in certain circumstances to set such balances off against one another for the purposes of completing the prescribed forms, thus reporting net balances only. |
| (2) | Unless otherwise provided in these Regulations, set- off shall be allowed only if all of the following circumstances apply, namely— |
| (a) | a legal right of set-off must exist and the reporting institution should have obtained a legal opinion to the effect that its right to apply set-off is legally well-founded and would be enforceable in the liquidation or bankruptcy of the client(s) or of the institution; |
| (b) | the debit and credit balances must relate to the same person; |
| (c) | both the debit and the credit balances must be denominated in the same currency; and |
| (d) | the debit and credit balances must have identical maturities. |
| (3) | No set-off shall be allowed in respect of balances relating to clients, other than foreign banks, outside the Republic, the self-governing territories and the independent states. |