Inside the compliance failures behind Capitec’s R28 million fine
Capitec has been hit with a R28m administrative penalty after the Prudential Authority identified shortcomings in customer due diligence, employee training and anti-money-laundering controls. R5.5m of the penalty is conditionally suspended for 36 months
South Africa's financial regulator, the Prudential Authority, has imposed a R28 million fine on Capitec Bank for failing to adhere to the Financial Intelligence Centre Act (FICA) requirements. The authority discovered issues during inspections conducted in 2023, including inadequate customer due diligence, insufficient training for employees, and flawed processes for managing money-laundering and terrorist financing risks.
The fine, which includes R5.5 million suspended for 36 months, consists of five cautions prohibiting Capitec from repeating these compliance lapses. The bank was also found lacking in its risk management and compliance program, particularly in areas such as terrorist property reporting and financial sanctions. These administrative gaps specifically relate to client due diligence, employee training, and regulatory reporting from 2019 to 2023, though the regulator emphasized these findings do not indicate any actual instances of money laundering or other illicit activities.
Ninety One Assurance, a subsidiary of asset manager Ninety One, also received a R6 million penalty for similar compliance issues, though R2.5 million of that amount was conditionally suspended for three years. The Prudential Authority stressed its role in enforcing FICA standards to support South Africa's commitments to the Financial Action Task Force.
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