The South African Reserve Bank (SARB) has imposed administrative sanctions on five banks and penalties to the collective tune of over R30 million and instructed them to take corrective action. “This was after it conducted routine inspections in terms of the Financial Intelligence Centre Act (FIC Act) and found weaknesses in each of the banks’ control measures,” stated SARB.
The five banks affected are Habib Overseas Bank Limited, Investec Bank Limited, GBS Mutual Bank, The South African Bank of Athens Limited and the Standard Chartered Bank, Johannesburg Branch.
The inspections were conducted as part of a mandatory protocol governed by the FIC Act, to ensure that banks have adequate structures in place to ‘combat money laundering and the financing of terrorism.’
“The administrative sanctions were not imposed because these banks were found to have facilitated transactions involving money laundering or the financing of terrorism but because of weaknesses in each of the banks’ control measures,” added SARB.
The sanctions imposed are as follows:
Habib Overseas Bank Limited: “A financial penalty of R1 million and a directive to take remedial action to address deficiencies in the area of inadequate controls and working methods pertaining to the reporting of suspicious and unusual transactions,” SARB explained.
GBS Mutual Bank: A R500 000 financial penalty coupled with a reprimand and directive to take remedial action to address deficiencies. These deficiencies included: “identifying and verifying customers’ details (better known as know-your-customer or KYC requirements),training of employees to enable them to comply with the provisions of the FIC Act and the bank’s internal rules, andfailure to implement adequate processes and working methods in relation to the sanctions screening of customers to ensure that the bank complies with its reporting duties,” SARB highlighted.
Investec Bank Limited: A financial penalty of R20 million and instruction to address their “failure to implement adequate processes and working methods in relation to the sanctions screening of related parties of customers to ensure that the bank complies with its reporting duties,” added SARB.
The South African Bank of Athens Limited: A R3 million financial penalty, and a directive to take remedial action addressing “identifying and verifying customers’ details, andfailure to implement adequate processes and working methods in relation to the sanctions screening of customers to ensure that the bank complies with its reporting duties,” SARB said.
Standard Chartered Bank – Johannesburg Branch: A financial penalty of R10 million was imposed along with an instruction to address the identifying and verifying of customers’ details, and the failure to report certain cash transactions above R24 999.99 to the Financial Intelligence Centre,” SARB stated.
Each bank was ordered to pay the penalty into the Criminal Assets Recovery Account as FIC Act stipulated.
“All banks are co-operating fully with the SARB to remediate the identified shortcomings within agreed timeframes,” SARB remarked.
