Capitec fined R28m after regulator flags failures in anti-money laundering controls
Capitec has been fined R28m by the Prudential Authority over weaknesses in customer checks, employee training and controls for financial sanctions and terrorist-property reporting.
South Africa's Prudential Authority (PA) has imposed a R28 million fine on Capitec Bank for failing to comply with anti-money laundering laws, according to regulatory reports. The fine, which includes R5.5 million conditionally suspended for 36 months, stems from an inspection that identified weaknesses in various areas of the bank's compliance processes.
The PA discovered that Capitec had not properly conducted due diligence on sampled client files and lacked adequate systems and controls to manage specific money-laundering and terrorist financing risks. Furthermore, the bank's employee training and certain screening and reporting procedures were found to be deficient. The administrative penalties consist of five cautions against repeating the non-compliant actions, along with the overall R28 million fine.
The PA also imposed R10 million for customer due diligence failures, R5 million each for enhanced and ongoing due diligence shortfalls, R3 million for inadequate employee training, and R5 million for issues with terrorist property reporting and financial sanctions controls. Capitec has cooperated with the regulator in addressing the identified deficiencies and control weaknesses.
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