July 7, 06:50

Financial supervisory body imposes fines on banks and insurers totaling over 115 million rand

The South African supervisory body has imposed regulatory fines on financial institutions totaling over 115 million rand during the 2024/25 financial year.

Reasons and Focus of Regulation

According to the latest annual report from the Prudential Authority, sanctions were applied to banks, insurance companies, and other regulated entities for violating financial sector legislation. Violations included non-compliance with the Financial Intelligence Centre Act (FICA) and prudential requirements.

The head of the South African Reserve Bank, Lesetja Kganyago, noted that during the reporting period, the management focused on several measures aimed at strengthening South Africa's financial system. He emphasized the ongoing protection of financial clients, the fight against risks such as increasingly complex cyberattacks and climate change, and the promotion of healthy lending to support economic activity.

Details of Sanctions and Supervision

Nomfundu Tshazibana, Deputy Governor of the South African Reserve Bank and CEO of the Prudential Authority, stated that a risk-based, proactive supervisory plan is being implemented. This plan includes regular bilateral meetings with foreign regulators, country visits, and supervisory colleges for banking and internationally active insurance groups.

Capitec Bank received the largest fine of 56.25 million rand. Part of this amount, specifically 10.5 million rand, was suspended. The reason was the discovery by the Prudential Authority of multiple violations related to anti-money laundering controls, customer due diligence, cash threshold reporting, suspicious transaction reporting, as well as risk management and compliance requirements.

Sanctions in the Financial Sector

Compliance enforcement actions covered a wide spectrum of South Africa's financial sector. Institutions sanctioned included Old Mutual Life, Safrican Insurance (a Sanlam subsidiary), the South African subsidiary of the State Bank of India, Finbond Savings Bank, Escap Insurance (an Eskom subsidiary), Assupol Life, Monarch Insurance (a Lewis Group subsidiary), commercial insurer Infiniti Insurance, and the NEHAWU SACCO savings and credit cooperative.

Specific fines amounted to: Old Mutual Life — 15.9 million rand; Safrican Insurance — 13 million rand; State Bank of India South Africa — 10.25 million rand; Escap — 7.645 million rand; Finbond Mutual Bank — 5 million rand; Assupol Life — 4 million rand; Infiniti Insurance — 2.14 million rand; Monarch Insurance — 1 million rand; and NEHAWU SACCO — 20,000 rand.

Overall Regulator Activity

In addition to the fines themselves, the report demonstrates broader regulatory activity. The Prudential Authority reviewed 141 non-compliance cases during the financial year concerning alleged violations of financial sector legislation and FICA. Furthermore, 22 on-site inspections were conducted for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) among banks, foreign bank branches, and insurance companies.

Increased oversight comes amid South Africa's efforts to maintain reforms that allowed the country to exit the grey list of the Financial Action Task Force (FATF) in October 2025. A June bulletin from the South African Reserve Bank noted that exiting the grey list and the bank's shift to a revised target inflation rate of 3% stimulated investor sentiment in 2025. The central bank also noted that capital inflows before the October announcement reflected improved fiscal performance and market expectations regarding South Africa's exit from the FATF grey list.

Authorities continue to strengthen the country's anti-money laundering framework. As of July 1, travelers entering or leaving South Africa are required to declare cash, goods, or portable valuables exceeding 100,000 rand through SARS customs, while regulators prepare financial institutions and other accountable organizations for South Africa's next mutual FATF assessment, which is expected in 2027.

uzdaily.uzJune 30, 15:06

Central Bank of Uzbekistan Fines Banks and MFOs for Violating Consumer Rights

The Central Bank of the Republic of Uzbekistan continues its systematic work aimed at protecting the legitimate interests and rights of financial service consumers. Based on comprehensive inspections conducted in the first quarter of this year, the regulator identified numerous legislative violations by a number of commercial banks and microfinance organizations (MFOs), which resulted in administrative and financial liability for the violating entities.

Violations in Microfinance Organizations

During targeted inspections of MFOs Shaffof-moliya and Tezcoin, as well as AO Uzum Bank, specialists recorded various violations. In the microfinance organizations, cases were found of non-compliance with limits on citizens' permissible debt burden when issuing microloans, ignoring the established procedure for reviewing official appeals, concealing mandatory information in microcredit agreements, and delays in transferring credit history data to relevant bureaus.

Problems at Uzum Bank

An audit conducted at Uzum Bank confirmed deficiencies in website information disclosure, violations in handling customer complaints, untimely updating of data in credit bureaus, and the inclusion of provisions in agreements that contradict the law.

Fines Imposed on Financial Institutions

Given the scale of the identified shortcomings, the regulator imposed monetary fines: Uzum Bank was fined 215.5 million soms, MFO Shaffof-moliya received a fine of 201 million soms, and MFO Tezcoin was fined 156 million soms.

Inspection of Ipoteka-bank's Activities

Concurrently, the Central Bank examined citizen complaints regarding the activities of Ipoteka-bank. The supervisory service established that the bank incorrectly debited funds for loan repayments from customer cards before the established payment date, and also made unjustified withdrawals of funds (without owner consent) when such a clause was absent in the contract. Furthermore, the bank delayed the removal of encumbrances from mortgaged property in the state registry of pledges. For these violations, Ipoteka-bank was fined 105 million soms.

Results of Regional Branch Monitoring

In addition to direct inspections, the regulator used the 'mystery shopper' monitoring method during the first quarter to assess the transparency of operations in regional bank branches. These measures revealed systemic problems concerning the completeness and accuracy of consultations provided to citizens. Following the audits conducted using the 'mystery shopper' method, the Central Bank fined a total of 14 commercial banks for a total amount of 681.5 million soms. The largest sanctions were applied to two financial institutions: Agrobank must pay 255 million soms to the budget, and O'zsanoatqurilishbank must pay 119.5 million soms.