Fat fine for Absa

Cape Town - The South African Reserve Bank (Sarb) slapped Absa Bank [JSE:BGA] and Société Générale with a collective R12m fine, it said in a statement on Thursday.

"This was after the Sarb conducted inspections in terms of the Financial Intelligence Centre Act (FIC Act) and found weaknesses in Société Générale’s and Absa’s anti-money laundering and combating the financing of terrorism control measures."

The FIC Act mandates the Sarb to ensure that banks have adequate controls in place to combat acts of money laundering and the financing of terrorism.

Sarb said as part of these responsibilities it inspects banks to assess whether they have appropriate measures in place as required by the FIC Act.

It imposed administrative sanctions on both banks and directed them to take remedial action.
 
"It should be noted that the administrative sanctions were not imposed because Société Générale or Absa were found to have facilitated transactions involving money laundering or the financing of terrorism but because of weaknesses in the banks’ control measures," it emphasised.

Absa, which got a financial penalty of R10m, was directed to take remedial action relating to certain identified weaknesses in the bank’s controls and working methods pertaining to transaction monitoring.

The Johannesburg branch of Société Générale got a financial penalty of R2m, but it was suspended.

"The financial penalty is, however suspended, in terms of section 45C(4)(c) of the FIC Act, for a period of two (2) years from 27 October 2016, subject to Société Générale adhering to certain conditions imposed by the Sarb."

The bank must take remedial action in identifying and verifying customers’ details (better known as know-your-customer or KYC requirements); and maintaining customer and transactional records as prescribed, said Sarb.

"Société Générale and Absa are cooperating with the Sarb and have taken measures to address the identified compliance deficiencies and control weaknesses."

In August the Sarb imposed fines totaling a whopping R30m ion five banks.

The banks were 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.