Capitec Hit With Fine For Not Combatting Criminals Enough
R56 Milion Fine
Capitec Bank have been hit with a massive R56 Million fine for not doing enough to combat criminals using their accounts up until 2022.
Capitec Bank Sanctioned By SARB
The South African Reserve Bank (SARB) has imposed administrative sanctions on Capitec (South Africa’s largest bank by client numbers), for failing to meet certain compliance requirements under the Financial Intelligence Centre (FIC) Act.
Following inspections in 2021 and 2022, the Prudential Authority (PA) found that Capitec were not up to scratch in critical areas such as verifying client identities, identifying beneficial owners, and adhering to cash threshold and suspicious transaction reporting.
‘As a result, the SARB have hit Capitec with a massive R56.25 million penalty’
As a result, the SARB have hit Capitec with a massive R56.25 million penalty, with R10.5 million conditionally suspended for 36 months – presumably to motivate them to get things in order quickly.
The sanctions come amid reports of criminals using Capitec accounts for SIM swap fraud and illicit fund transfers. Money taken from fraud targets at other banks was regularly transferred to Capitec accounts where client verification and transfer monitoring was weak.
Doing Better In the Future
During the investigation, Capitec cooperated fully with the PA and has now implemented measures to address the various identified issues.
They say they are making an effort to stem such behaviour in the future and are improving compliance in this area. Obviously, Capitec do not want to be the ‘go to’ bank for crooks in SA.
All in all, it is perhaps a positive result stemming from a serious financial reminder.
