Johannesburg - The South African Reserve Bank (SARB) has fined 5 South African banks a total of R34 5million because they had weaknesses in control measures.
By far the heftiest fine was levelled against Investec, at R20 million, with the Johannesburg branch of Standard Chartered next at R10 million.
The weaknesses are related to controls required by the Financial Intelligence Centre Act. This law seeks to clamp down on money laundering and cash being used for illicit purposes, such as terrorism, and requires certain transactions of be reported.
The 5 banks that were fined are GBS Mutual Bank, Habib Overseas Bank, Investec Bank, The South African Bank of Athens , and Standard Chartered Bank - Johannesburg Branch.
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SARB says these fines emanated after inspections were conducted to see whether banks have appropriate measures in place as required by legislation. “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.”
GBS was fined R500 000 and has to take action to address deficiencies in identifying and verifying customers’ details (better known as know-your-customer and train staff to comply with the law.
Habib Overseas Bank was fined R1 million and has to remedy its inadequate controls and working methods around reporting of suspicious and unusual transactions.
The biggest fine, or R20 million, went to Investec, which failure to implement adequate processes and working methods around the sanctions screening of related parties of customers to ensure that the bank complies with its reporting duties.
The South African Bank of Athens was fined R3 million and has to ensure it can verify customer’s details. It also failed 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 says.
The Johannesburg branch of Standard Chartered Bank was fined R10 million and must address deficiencies around identifying and verifying customers’ details; and its failure to report certain cash transactions above R24 999.99 to the Financial Intelligence Centre.
“Each bank must pay the financial penalty imposed into the Criminal Assets Recovery Account as required by the FIC Act. All banks are co-operating fully with the SARB to remediate the identified shortcomings within agreed timeframes,” SARB says.
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