The South African Reserve Bank (Sarb) has fined Capitec R56.25m for not complying with anti-money laundering rules set out by the Financial Intelligence Centre Act (Fica).
Source: LinkedIn.
In a media statement, Sarb said it had conducted an inspection in 2021 focused on the retail bank segment while its 2022 inspection focused on the business banking segment of Capitec Bank, and that R10.5m of the fine “is conditionally suspended for a period of 36 months as from 30 July 2024”.
Sarb said Capitec failed to fully comply with sections 21(1) and/or 21A to 21H of the FIC Act in that it failed 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 verification of the identity of clients; as well as the verification of the identity of beneficial owners of legal entities and the address and source of funds.
There were also deficiencies linked to the conduct of PEP screening and ongoing due diligence including annual reviews for high-risk clients; andobtaining senior-management approval when re-risk rating clients or pertaining to reviews of high-risk clients.
Furthermore 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.
Capitec 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.
The PA confirms that Capitec co-operated with the Prudential Authority and has undertaken the necessary remedial action to address the identified compliance deficiencies and control weaknesses.
