Sarb fines 5 SA banks a whopping R30m

Cape Town - The SA Reserve Bank (Sarb) has slammed fines to the tune of over R30m on five banks over weaknesses in their control measures relating to money laundering or terrorism.

The five banks are GBS Mutual Bank, Habib Overseas Bank Limited, Investec Bank Limited, The South African Bank of Athens Limited, and the Johannesburg branch of Standard Chartered Bank.

"The inspections were conducted in terms of the FIC Act which mandates the Sarb to ensure that banks have adequate controls in place to combat money laundering and the financing of terrorism", the reserved bank said on Friday.

Sarb said it imposed administrative sanctions on the five banks and directed them to take remedial actions.

"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."

The administrative sanctions imposed on the five banks are as follows:
 
GBS Mutual Bank

A financial penalty of R500 000, a reprimand and a directive to take remedial action to address deficiencies in the following areas:

- 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; and
- failure 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.
 
Habib Overseas Bank Limited

A financial penalty of R1m and a directive to take remedial action to address deficiencies in the following area:

- inadequate controls and working methods pertaining to the reporting of suspicious and unusual transactions.
 
Investec Bank Limited

A financial penalty of R20m and a directive to take remedial action to address deficiencies in the following area:

- 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.
 
The South African Bank of Athens Limited

A financial penalty of R3m, a reprimand and a directive to take remedial action to address deficiencies in the following areas:

- identifying and verifying customers’ details; and
- failure 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.
 
Standard Chartered Bank – Johannesburg branch

A financial penalty of R10m, a reprimand and a directive to take remedial action to address deficiencies in the following areas:

- identifying and verifying customers’ details; and
- 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," said Sarb.

It added that all banks are co-operating fully to remediate the identified shortcomings within agreed timeframes.