The Reserve Bank’s Prudential Authority has slapped Absa Bank with a R10-million administrative sanction for various transgressions.
“The administrative sanctions imposed on Absa are due to the failure to comply with certain provisions of the FIC Act and consist of two cautions not to repeat the conduct which led to the non-compliance, a reprimand and a financial penalty totalling R10-million,” said the agency.
First fine is R7m
The agency explained this in a statement released on Friday after the JSE had closed at 5pm. It said that the first fine of R7-million was imposed on Absa for failing to conduct adequate customer due diligence. Also failure to enhanced due diligence in respect of the sampled client files as follows:
- Failure to adequately conduct customer due diligence on four of its foreign prominent public official (FPPO) client files. And to two of its politically exposed persons (PEP) in respect of state-owned enterprises; and
- Failure to adequately conduct enhanced due diligence on three of its domestic prominent influential persons (DPIPs) client files and five of its FFPO client files.
- The PA, according to the law, is mandated to supervise and enforce compliance by accountable institutions. It imposed a caution not to repeat the conduct which led to the non-compliance. Also a reprimand and a financial penalty of R7-million.
Additional R3m fine
The agency said it imposed the sanctions on Absa Bank as a result of its non-compliance with certain provisions of the FIC Act. This follows an inspection conducted on Absa in terms of Section 45B of the FIC Act in 2022.
Absa was hit with an additional R3-million fine for failing to comply with FIC Act Directive 5 of 2019, in that:
- 8 559 reported automated transaction monitoring system (ATMS) alerts were not timeously attended to within 48 hours;
- Four of the non-reportable ATMS alerts were not attended to within 48 hours; and
- Two non-reportable suspicious transaction report/suspicious activity report alerts were closed beyond the 15-day reporting period as stipulated by regulation 24(3) of the FIC Act Regulations.
“The PA imposed a caution not to repeat the conduct which led to the non-compliance and a R3-million penalty. It confirms that Absa cooperated with the PA and has undertaken the necessary remedial action. The remedial action aims to address the identified compliance deficiencies and control weaknesses.”
