South African Reserve Bank (SARB) has fined Capitec R56 million, for failing to comply with anti-money laundering regulations, as per the Financial Intelligence Centre Act.
The bank said the fine follows inspections conducted on Capitec Bank in terms of section 45B of the FIC Act in 2021 and 2022.
“The inspection in 2021 focused on the retail bank segment and the 2022 inspection focused on the business banking segment of Capitec Bank.
The sanctions consist of seven cautions, one reprimand and a financial penalty totalling R56.25 million, of which R10.5 million is conditionally suspended for a period of 36 months as from 30 July 2024,” read a statement from the SARB.
Amongst some of the non-compliance include failure to adequately conduct customer due diligence, enhanced due diligence and ongoing due diligence in respect of the sampled client files.
“Aspects of non-compliance inter alia included deficiencies concerning the following, verification of the identity of client, identification of the beneficial owners of legal entities, obtaining and/or verification of the address and source of funds, conducting PEP screening and ongoing due diligence including annual reviews for high-risk clients, and obtaining senior management approval when re-risk rating clients or pertaining to reviews of high-risk clients,” added the statement.
Moreover, Capitec failed to comply with section 28 of the FIC Act terms of Cash Threshold Reporting (CTRs) to the Financial Intelligence Centre (FIC) in that it failed to inter alia ensure timeous reporting of CTRs and CTRAs to the FIC.
The bank also failed to comply with section 29 of the FIC Act in that it failed to timeously report Suspicious Transaction Reports (STRs) and/or Suspicious Activity Reports (SARs) to the FIC.
Capitec failed to comply with FIC Act Directive 5 of 2019 in that it failed to attend to Automated Transaction Monitoring System alerts within the required 48-hour period.
In addition, Capitec failed to comply with aspects of section 42 of the FIC Act linked to its Risk Management and Compliance Programme (RMCP) in that it inter alia failed to.
