Standard Bank of South Africa has been hit with a R13 million fine by the Prudential Authority for failing to comply with financial regulations designed to prevent money laundering and the funding of illegal activities.
The Prudential Authority (PA), a division of the South African Reserve Bank, has imposed a R13 million fine on The Standard Bank of South Africa Limited ( Standard Bank ) for multiple financial offenses . The PA emphasized that the Financial Intelligence Centre Act (FIC Act) is designed to combat crimes such as money laundering and the financing of illicit activities.
It mandates banks to diligently monitor customer transactions and promptly report any suspicious activities to the Financial Intelligence Centre (FIC). A 2022 investigation by the PA uncovered that Standard Bank had failed to adhere to these regulations in several instances. As a consequence, the PA imposed sanctions, which are penalties levied against entities or individuals for violating the law. The sanctions against Standard Bank included warnings and a financial penalty. The PA alleged that the bank had not conducted routine due diligence checks on two of its clients in 2018 and 2019. Due diligence is a legal requirement to ensure that customers are not involved in questionable financial activities. The PA issued a formal warning to Standard Bank, urging it to rectify this oversight. Furthermore, the PA reported that the bank had inadequately documented the submission of 43 suspicious transaction reports (STRs) and suspicious activity reports (SARs) to the FIC. In one instance, Standard Bank was accused of failing to report a suspicious transaction altogether, resulting in an additional warning and a fine. The PA also stated that several suspicious activities were closed after exceeding the permitted 15-day period. The South African Reserve Bank confirmed that Standard Bank had cooperated fully during the investigation and had already taken steps to address its shortcomings. The bank has pledged to strengthen its systems and controls to prevent similar issues in the future. The Prudential Authority plays a crucial role in upholding the law within the banking sector to safeguard South Africa's financial system
Standard Bank Prudential Authority Financial Offenses Money Laundering Financial Intelligence Centre
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