South Africa\u2019s banking regulator said there is a high risk of money laundering and terrorist financing activity in the industry, citing the extensive use of cash and exposure to overseas lenders.<\/p>\n
The Prudential Authority of the South African Reserve Bank in a report published in May 2020 had assessed the risk to the banking sector as medium to high. In a report published on Tuesday, the regulator said the nation\u2019s five largest banks, which control 89% total assets, were most at risk.<\/p>\n
\u201cOne of the large banks indicated a total of 8,388 clients with unknown citizenship, which poses a high risk within the sector,\u201d the authority said in the report.<\/p>\n
Large banks are \u201cstill targeted by criminals as clients use cash extensively and can use non-face-to-face methods such as automated teller machines to deposit cash, while the source of funds and details of depositors are largely unknown.\u201d<\/p>\n
The latest report may help banks improve their procedures, just as Africa\u2019s most-industrialized nation battles to stay off the Financial Action Task Force\u2019s gray list.<\/p>\n
The watchdog found South Africa had shortcomings in combating money laundering and the financing of terrorism, and gave the government until October to show a credible plan to address the deficiencies.<\/p>\n