The South African Reserve Bank (SARB) has imposed administrative sanctions on Capitec, the country\u2019s biggest bank by subscribers.<\/p>\n\n\n\n
The sanctions are due to Capitec Bank\u2019s failure to comply with certain provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act).<\/p>\n\n\n\n
The Prudential Authority (PA), operating within the administration of the SARB, is mandated to supervise and enforce compliance with the provisions of the FIC Act.<\/p>\n\n\n\n
It inspected Capitec Bank in 2021, focused on the retail banking segment, and the 2022 inspection focused on the business banking segment.<\/p>\n\n\n\n
It found that Capitec failed to adequately conduct, enhance, and perform ongoing customer due diligence on the sampled client files. <\/p>\n\n\n\n
It did not verify clients’ identities, identify the beneficial owners of legal entities, or obtain and verify the address and source of funds.<\/p>\n\n\n\n
It also failed to comply with cash threshold reporting (CTRs) to the Financial Intelligence Centre (FIC) with missed deadlines.<\/p>\n\n\n\n
Another problem was that Capitec did not timeously report suspicious transaction reports (STRs) and suspicious activity reports (SARs).<\/p>\n\n\n\n
It also failed to attend to Automated Transaction Monitoring System alerts within the required 48 hours.<\/p>\n\n\n\n
Capitec further neglected to adhere to the risk management and compliance programme (RMCP).<\/p>\n\n\n\n
The sanctions consist of seven cautions, one reprimand and a financial penalty totalling R56.25 million.<\/p>\n\n\n\n
The Prudential Authority conditionally suspended R10.5 million for 36 months from 30 July 2024.<\/p>\n\n\n\n
It said Capitec cooperated with it and has undertaken the necessary remedial action to address the identified compliance deficiencies and control weaknesses. <\/p>\n\n\n\n
These sanctions followed numerous reports of criminals using Capitec accounts as part of SIM swap fraud.<\/p>\n\n\n\n
Criminals often targeted clients from large banks like Absa and FNB. They typically transferred their victims\u2019 funds to Capitec accounts.<\/p>\n\n\n\n
Capitec was seen as the \u2018go-to bank\u2019 for criminals, and it was initially unclear why. The Reserve Bank sanctions may explain it.<\/p>\n\n\n\n
Capitec\u2019s lackluster controls regarding verifying clients’ identities would have made it easy for criminals to use the bank for nefarious purposes.<\/p>\n\n\n\n
Capitec responds<\/strong><\/p>\n\n\n\n Capitec confirmed that it received administrative sanctions from the Prudential Authority (PA) on 20 December 2024. <\/p>\n\n\n\n These sanctions result from two inspections conducted in May 2021 and March 2022. The inspections formed part of the PA’s regular supervisory process under the Financial Intelligence Centre (FIC) Act.\u00a0<\/p>\n\n\n\n The inspections assessed Capitec’s compliance with the FIC Act, in relation to specifically customer due diligence, transaction monitoring and reporting obligations covering the years 2017 to 2022. As a result of these inspections, Capitec received a financial penalty of R56.25 million, of which R10.5 million was conditionally suspended for 36 months.<\/p>\n\n\n\n “Capitec has cooperated fully with the Prudential Authority during these inspections and is committed to resolving all compliance and control matters identified,” said the bank.<\/p>\n","protected":false},"excerpt":{"rendered":" South Africa\u2019s biggest bank by subscribers, Capitec, has been hit with administrative sanctions by the South African Reserve Bank.<\/p>\n","protected":false},"author":10,"featured_media":769012,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[2002,20457],"class_list":["post-805253","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-capitec-bank","tag-south-african-reserve-bank-sarb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/805253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=805253"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/805253\/revisions"}],"predecessor-version":[{"id":805451,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/805253\/revisions\/805451"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/769012"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=805253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=805253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=805253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}