In March market sentiment deteriorated markedly owing to the weakness in the external value of the rand, rising official interest rates in major financial centres and higher risk premiums on South African assets.
If the bank accepts too much risk, it may no longer be able to meet its obligations to depositors. Therefore, in most countries, only licensed banks are allowed to attract deposits from the public. Licensed banks are subject to prudential supervision and have to comply with an extensive and strict set of regulations.