Three South African banks hit with sanctions in six months

Over the past six months, three of South Africa’s major banks have been hit with administrative sanctions, resulting in millions of rands in fines. 

These banks are Capitec, Standard Bank, and Absa. The sanctions were imposed by the South African Reserve Bank’s Prudential Authority (PA). 

The PA regulates banks, insurers, and other financial institutions to safeguard the soundness of the financial system and promote financial stability. 

One of its key responsibilities is to ensure banks comply with FICA, which includes identifying and reporting suspicious transactions and maintaining strong internal controls to prevent money laundering and terror financing. 

The PA can also impose administrative sanctions when a bank fails to meet these obligations. These sanctions often include financial penalties and, in some cases, directives to improve internal systems and controls. 

However, such sanctions do not imply that the banks were involved in criminal conduct, but that their compliance systems can be improved.

Capitec Bank was sanctioned in December 2024 for failing to adequately manage client onboarding and transaction monitoring risks. 

The PA found shortcomings in Capitec’s application of due diligence measures, though the bank later confirmed it was taking corrective steps.

Standard Bank, South Africa’s largest lender, received its sanction in January 2025. The PA highlighted deficiencies in the bank’s ability to detect and report suspicious transactions in a timely manner. 

While the bank was not fined, it was issued a formal reprimand and ordered to strengthen its compliance processes.

In April 2025, Absa was sanctioned after the PA identified weaknesses in its risk assessment procedures and record-keeping for specific high-risk clients. 

The bank received a financial penalty and was instructed to implement enhanced remedial measures.

All three banks have since committed to improving their compliance frameworks. The PA’s actions reflect a broader push to tighten regulatory enforcement.

This push results from South Africa’s grey-listing, and as the country works to align with global anti-money laundering standards to avoid further international scrutiny.

All three banks and a more in-depth explanation of what the PA sanctioned them are outlined below. 

Capitec

Under the SARB, the PA imposed administrative sanctions on Capitec at the end of 2024 for multiple failures to comply with the Financial Intelligence Centre Act (FIC Act), following inspections in 2021 and 2022. 

The inspections, focusing on Capitec’s retail and business banking arms, revealed serious weaknesses in customer due diligence and anti-money laundering controls between 2017 and 2022. 

Capitec failed to verify customer identities, identify beneficial owners of legal entities, and obtain or verify clients’ addresses and sources of funds. 

It also neglected to report suspicious and unusual transactions (STRs and SARs) and cash threshold transactions (CTRs) within the required timeframes. 

Additionally, Capitec did not respond to automated transaction monitoring alerts within the mandated 48 hours and failed to comply with its own Risk Management and Compliance Programme (RMCP).

These failings led to administrative sanctions comprising seven cautions, one reprimand, and a financial penalty of R56.25 million, of which R10.5 million is conditionally suspended for 36 months from 30 July 2024. 

Since then, Capitec has cooperated fully with the PA and noted that it is committed to resolving all compliance and control matters identified.

Standard Bank

In January 2025, the PA sanctioned Standard Bank for significant non-compliance with the Financial Intelligence Centre Act (FIC Act), which was identified during a 2022 inspection. 

It found that the bank failed to conduct ongoing due diligence on two clients, with no reviews done in 2018 or 2019. 

Additionally, Standard Bank failed to keep records of the submission dates for 43 suspicious or unusual transaction and activity reports to the Financial Intelligence Centre (FIC).

A major concern was the bank’s failure to timely report 1,466 cash transactions and aggregation reports and 17,259 suspicious or unusual transaction reports. 

It also failed to report one required suspicious transaction. Standard Bank did not respond to 5,729 automated transaction monitoring alerts within the prescribed 48-hour period, and 94,558 STR/SAR alerts were closed beyond the 15-day regulatory deadline.

The PA issued six cautions in response and levied a financial penalty of R13 million. Standard Bank has acknowledged the findings and cooperated with the PA, taking corrective steps to address the compliance gaps. 

Absa

In April 2025, Absa was penalised by the PA following a 2022 inspection that revealed various breaches of the Financial Intelligence Centre (FIC) Act. 

The PA’s investigation uncovered deficiencies in Absa’s customer due diligence procedures, particularly regarding foreign and domestic politically exposed persons (PEPs) and prominent influential persons (PIPs). 

The bank failed to properly apply enhanced due diligence to several client files, including four foreign PEPs and multiple state-linked individuals.

The PA also flagged failures in Absa’s transaction monitoring obligations. Specifically, it found that 8,559 automated transaction monitoring alerts were not reviewed within the required 48-hour period. 

Four alerts flagged as non-reportable were also attended to late. Furthermore, two suspicious transaction alerts were closed outside the 15 days mandated by FIC Act regulations.

Absa received two cautions, one reprimand, and a financial penalty of R10 million, split into R7 million for due diligence failures and R3 million for lapses in transaction monitoring. 

While serious, the PA noted that Absa cooperated with the investigation and has taken steps to rectify the compliance failures. 

PA noted that these sanctions underscore the importance of robust client verification and timely transaction oversight in mitigating financial crime risks.