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The Reserve Bank fines the top four banks R125 million over lax FICA controls

by , 16 April 2014

Earlier today, the South African Reserve Bank announced it fined the four largest South African banks over lax Financial Intelligence Centre Act (FICA) controls. This relates to the banks failing to have adequate provisions against money laundering and the financing of terrorism. The central bank dealt each bank a hefty fine. Let's take a closer look at what happened…

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Standard Bank received the highest fine

The Reserve Bank fined SA’s “top four banks a total of R125 million over lax anti-money laundering controls,” reports Fin24. It fined Standard Bank R60 million, FirstRand R30 million, Nedbank R25 million and Barclays Africa R10 million.

Under FICA, the central bank must “supervise and enforce compliance with FICA rules,” says BDLive. This includes ensuring the banks have “controls to deal with money laundering and combat the financing of terrorism”.

The director of the Reserve Bank’s Financial Intelligence Centre, Murray Michell, says if the banks don’t comply, it “can open the door to criminals abusing our institutions,” notes Bloomberg.

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The Reserve Bank pinpointed where controls must tighten

The Reserve Bank found there were deficiencies in the current practices, adds Bloomberg. These include “identifying and verifying customer details, maintaining records, and managing and processing potentially suspicious transactions”.

Nedbank and Standard Bank said they’re “taking remedial measures to strengthen their controls,” says MoneyWeb.

In January, Standard Bank received a fine from the UK’s financial regulator over weaknesses in its money laundering controls at its British arm. In this case, Standard Bank received a fine of £7.6 million (around R135 million).

So it looks like the Reserve Bank is keeping SA’s banks of their toes. This regulation is good for the integrity of SA’s banks.



The Reserve Bank fines the top four banks R125 million over lax FICA controls
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