Capitec Bank Hit With R28 Million Fine for FICA Compliance Violations

• The Prudential Authority penalised Capitec Bank after an administrative inspection uncovered serious compliance gaps
• Inspectors found five specific breaches, including failures in customer verification and protocols preventing money laundering
• A portion of the fine has been conditionally suspended for 3 years, depending on Capitec's compliance with remediation directives

SOUTH AFRICA — The Prudential Authority has fined Capitec R28 million in financial penalties and imposed administrative sanctions after a targeted inspection revealed widespread shortcomings in the lender's compliance controls. The fine came as Capitec expands in physical reach in the country.

According to eNCA, the Reserve Bank's regulatory arm conducted a review of Capitec's internal operational procedures and client documentation, uncovering systemic deficiencies across several critical areas of the bank's anti-money laundering framework.

Five sanctions issued against Capitec

The Prudential Authority issued five administrative sanctions linked to distinct operational failures. Capitec was accused of failing to perform adequate due diligence when onboarding new customers and of failing to perform due diligence on accounts flagged as high-risk.

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Inspectors further found that ongoing monitoring of existing customer accounts was insufficiently maintained across sampled files. Bank personnel were not given the mandatory, continuous FICA training required under the Act.

Beyond those shortcomings, the regulator identified internal framework failures, including the use of unapproved screening documentation and the absence of established procedures for reporting assets linked to terrorist financing.

Part of fine conditionally suspended

A portion of the total monetary penalty will remain conditionally suspended over a three-year period. The suspension is contingent on Capitec maintaining full compliance with all remediation directives issued by the regulator during that time.

Capitec confirmed it cooperated with the Prudential Authority throughout the entire inspection process, and stated that all identified procedural gaps have since been resolved through updated operational safeguards.

Capitec founder donated R208 million to the DA

In a related article, Briefly News reported on Capitec founder Michiel le Roux’s more than R208 million in donations to the Democratic Alliance. The contribution makes him the party’s largest individual donor on record.

Source: Briefly News