Nedbank fined R35 million for administrative shortcomings

Nedbank Limited has been fined R35 million by the South African Reserve Bank (SARB) for its failure to report cash transactions of significant amounts, amongst after administrative shortcomings.

The list of the bank’s shortcomings is a long one:

The SARB said that Nedbank failed to comply with its Risk Management and Compliance Programme obligations, in terms of sections 42(1), 42(2) and 42(2A) of the FIC Act, in that it:

Failed to apply a risk-based approach across its business clusters, in accordance with its Risk Management and Compliance Programme.

Failed to apply enhanced due diligence controls.

Failed to apply risk-rate to its clients.

Failed to provide evidence that it had developed and documented end-to-end procedures, working methods relating to its systems and processes used to onboard clients.

Failed to provide evidence that its controls and/or oversight measures were able to extract the correct data that would allow it to accurately risk-rate its clients.

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The Prudential Authority (PA) also imposed a caution, a reprimand and a financial penalty of R5 million, of which R2 million has been conditionally suspended for 12 months, within the SARB to supervise and enforce compliance with the provisions of the FIC Act in respect of the accountable institutions it supervises.

The SARB said that it was important to highlight that there was no evidence of Nedbank being involved in or facilitating transactions involving money laundering or the financing of terrorism.  

It also noted that Nedbank is cooperating with the PA and continues to undertake the necessary remedial actions to address the identified compliance deficiencies and control weaknesses.