Capitec Bank received administrative sanctions of 28 million rand from the Prudential Authority due to violations related to customer verification, staff training, and anti-money laundering and counter-terrorism financing measures.
The Prudential Authority, which operates under the South African Reserve Bank, announced these sanctions on Friday following inspections conducted at the institution in 2023. The PA reported that Capitec failed to properly verify selected client files and lacked adequate processes and controls to manage certain money laundering and terrorist financing risks.
Furthermore, deficiencies were found in the bank's staff training, as well as in the approval and documentation of some verification and reporting procedures.
R28 Million Fine for Capitec
The total fine for Capitec amounts to 28 million rand, of which 5.5 million is conditionally suspended for 36 months. The PA stated: 'The administrative sanctions imposed on Capitec include five warnings not to repeat the conduct leading to non-compliance, and a financial penalty totaling 28 million rand, of which 5.5 million is conditionally suspended for a period of 36 months from October 13, 2025.'
During the inspection, the Prudential Authority identified several areas of non-compliance. These included shortcomings in conducting customer verification, enhanced due diligence, and ongoing monitoring of selected client files. The regulator also determined that Capitec did not provide adequate continuous training for some employees.
Another identified deficiency concerned the bank's risk and compliance management program. The Prudential Authority found issues in processes related to reporting on terrorist financing and financial sanctions, among other areas. Additionally, the commercial bank Capitec implemented guidelines for checking names for money laundering and payment screening without prior management approval.
Capitec's Response
Capitec informed Moneyweb that the penalty relates to administrative gaps in certain compliance processes between 2019 and 2023. The bank specified that the identified deficiencies covered aspects of customer verification, staff training, and regulatory reporting.
Capitec emphasized: 'It is important to note that these findings are not related to any cases of money laundering, illegal financial activity, fraud, scams, or financial losses at Capitec.'
The bank acknowledged the role of the Prudential Authority and other regulators in ensuring adherence to FICA standards and supporting South Africa's commitments to the Financial Action Task Force.
Ninety One Assurance
Ninety One Assurance Limited, a subsidiary of asset manager Ninety One, was also fined 6 million rand by the Prudential Authority following an inspection in 2023. Of this amount, 2.5 million is conditionally suspended for three years.
The Prudential Authority found that Ninety One Assurance failed to establish and maintain a risk management program that would allow it to properly identify, assess, control, and mitigate risks associated with politically exposed persons and other high-risk individuals and their businesses.