The banks have also questioned whether the country’s Competition Commission can penalise banks which do not have subsidiaries or branches in South Africa, the sources said.
The commission is seeking to impose fines on more than a dozen local and foreign banks that it alleges colluded to co-ordinate trading in the rand and the US dollar.
The agency launched the investigation in April 2015, joining a global clampdown that has led to big banks being fined around $10 billion (R136.8 billion) in total for rigging interest rate and forex benchmarks.
It referred the case to the Competition Tribunal, which holds hearings on anti-trust matters before making a ruling.
It recommended that the tribunal impose fines amounting to 10 percent of the banks’ South African revenues, the maximum allowed.
At a closed preliminary hearing last month, some of the banks raised objections about the lack of specific detail in the case to allow their lawyers to present a defence, one of the sources said.
The tribunal will meet again in July to consider the banks’ objections if the commission has done enough to fine-tune its case, the sources said.
The commission was not immediately available for comment. Under South African regulations, the commission is required to investigate anti-competitive cases within South Africa, or those that have an impact in the country.
“If there was anti-competitive conduct, as the commission alleges, the question then is: Did it have an effect in South Africa?
"That’s one jurisdictional issue the banks have raised,” another source said.
Another issue raised was how banks with no subsidiaries or branches in South Africa would be affected.
“Some of the banks want jurisdictional issues to be cleared up because some of those named have no branches in South Africa,” one source said.
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“How do you calculate a fine for banks with no branches in South Africa?”
Australia’s ANZ Banking Group has no branches in South Africa. Nomura launched a branch in South Africa only in April last year, almost a year into the commission’s investigation.
Among the banks, Barclays Africa Group, a regional unit of Barclays, has been granted conditional immunity from prosecution in return for its co-operation in the investigation.
In February, the local arm of Citigroup was fined $5million for its role in the affair. The commission said it had set the fine for Citibank South Africa at less than 10percent of its annual turnover after the bank undertook to co-operate with the commission.
Other banks named in the investigation were Standard Bank , Investec, JP Morgan, BNP Paribas, Credit Suisse Group, Commerzbank, Macquarie Bank, Bank of America Merrill Lynch, HSBC and Standard Chartered.
Standard Bank, South Africa’s second biggest bank by market value, said its own internal investigation had found no evidence of any wrongdoing.
“Nonetheless, Standard Bank is treating these allegations very seriously and will engage fully with the Competition Commission and the Competition Tribunal to better understand the basis for the complaints,” spokesperson Erik Larsen said.
StanChart would continue to co-operate with the tribunal process, spokesperson Geraldine Matchaba said. JP Morgan, Commerzbank, Bank of America and Nomura declined to comment. Credit Suisse, BNP Paribas, HSBC, ANZ and Macquarie did not respond to requests for comment.