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South African Reserve Bank Fine Banks over R37.5m for money laundering weaknesses

The South African Reserve Bank has imposed administrative sanctions on five banks and directed them to take remedial actions.


The five banks are Standard Bank SA, GroBank (formerly SA Bank of Athens), Ubank, Bank of China (Johannesburg branch) and HBZ Bank.


The SARB said in a statement early on Friday evening that it found weaknesses in each of the banks' money laundering control measures following routine inspections conducted in terms of the Financial Intelligence Centre Act (FIC Act).


In terms of the act, the Prudential Authority must inspect banks' systems during the year to assess whether they have appropriate and adequate measures and money laundering or terrorist financing controls in place to comply with the act. 


According to SARB, the five banks are cooperating and have agreed to the necessary measures to address the identified compliance deficiencies and control weaknesses.


SARB said the administrative sanctions were imposed because of weaknesses identified in banks' compliance with the provisions of the act and not because they were found to have facilitated transactions involving money laundering or the financing of terrorism.


A SARB spokesperson told Fin24 that the inspections involve lengthy processes which could take between two and six weeks, depending on the size of the bank. Banks are informed ahead of time when they will be visited by SARB to do the inspections.


Standard Bank of SA was fined a financial penalty of R30m, with a directive to take remedial action for failure to comply with suspicious and unusual transaction reporting requirements in terms of the act. However, R7.5m of the R30m is suspended for a period of three years subject to the bank adhering to certain conditions imposed by the SARB.


GroBank was fined R5m, but this was suspended in total for a period of three years, subject to the bank adhering to certain conditions imposed by the SARB. 

GroBank was cautioned not to repeat the conduct, which led to non-compliance by failing to comply with cash threshold reporting requirements; failing to comply with suspicious and unusual transactions reporting requirements, and failing to comply with certain training requirements.

Bank of China's Johannesburg branch was fined R2m, which was also suspended in total, as with GroBank, subject to the bank adhering to certain conditions imposed by the SARB.


Ubank was fined R500 000 and given a directive to take remedial action for failure to comply with the cash threshold reporting requirements in terms of the act, while HBZ Bank was cautioned not to repeat the conduct which led to non-compliance by failing to comply with suspicious and unusual transaction reporting requirements, and failing to comply with training requirements of the act. 



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