The South African Reserve Bank (SARB) has imposed fines on South Afrcia’s four largest banks, totaling R125 million, for not imposing adequate anti-money laundering controls and combating the financing of terrorism.
In terms of the Financial Intelligence Centre Act, No. 38 of 2001 (FICA), the SARB said it is mandated to supervise and enforce banks’ compliance with FICA to ensure that the necessary anti-money laundering and combating the financing of terrorism controls are in place.
Flowing from these responsibilities, inspections were conducted at Absa Bank, FirstRand Bank, Nedbank, and Standard Bank.
Stemming from the findings of the inspections, the SARB imposed administrative sanctions, including the ordering of certain remedial action on the respective banks, with Standard Bank receiving the heaviest penalty of R60 million.
The administrative sanctions imposed on the respective banks include:
- Absa: A financial penalty of R10 million, a reprimand, and a directive to take remedial action to address various deficiencies including the management and processing of potential suspicious and unusual transactions;
- FirstRand: A financial penalty of R30 million and a directive to take remedial action to address various deficiencies including identifying and verifying customers’ details;
- Nedbank: A financial penalty of R25 million and a directive to take remedial action to address various deficiencies including controls and systems relating to the detection of property associated with terrorists and related activities;
- Standard Bank: A financial penalty of R60 million and a directive to take remedial action to address various deficiencies including failure to report all cash transactions above R24,999.99 to the Financial Intelligence Centre.
“The administrative sanctions are not an indication that the banks in question have in any way facilitated transactions involving money laundering and the financing of terrorism,” the SARB stressed.
It said that each bank must pay the financial penalty imposed into the criminal assets recovery account as required by FICA.
“All the banks are co-operating and working with the SARB to address the identified compliance deficiencies and control weaknesses, and have undertaken to remediate the identified shortcomings,” the Reserve Bank said.