Update details at bank or risk your account being frozen

Fica was introduced in 2001 to combat financial crimes such as money laundering, tax evasion and financing of terrorist activities while also protecting bank customers from fraud.

A media briefing was held by the association and its subsidiary, the South Africa Banking Risk Information Centre (Sabric) on 25 March in Rosebank.

Cas Coovadia, managing director of Basa said the area of financial intelligence is becoming increasingly complex. He said commercial banks were required by Fica regulations to request certain documentation and updated information from customers.

“Many of the clients get frustrated by [these requirements] but it is important to sensitise the public to this,” said Coovadia.

Kalyani Pillay, CEO of Sabric, explained that the awareness campaign was launched because many banks have difficulties trying to get their customers to update their information.

“We understand fully that it can be an inconvenience… but it is absolutely necessary. It is important for banks to know who they are dealing with, as they have a legal obligation to do so. It is [the bank’s] obligation to monitor transactions and suspicious activities,” said Pillay.

Pillay stated that when customers don’t respond to communications sent by their bank to update their information within a stipulated time frame, banks are compelled by law to enforce strict measures – which includes freezing a customer’s account.

Fica compliance requires banks to “know [their] customers”, and the basic documentation needed for Fica include ID and proof of address, while certain banks, depending on their own risk assessments, may request additional documents such as pay slips.

Pillay said that the deadlines, prior to the freezing of an account, are set by the respective banks. And that the updating of information was also the responsibility of the customers, as the bank will only have the contact information their customers provide voluntarily.

However, she also emphasised that it was important for customers to present their updated information specifically to their bank, and to remain wary of fraudsters soliciting details from customers via email, SMS or phone calls under the pretence of Fica compliance.

Pillay stressed that Fica compliance applied to all bank clients which extends to businesses, trusts, associations and other legal entities with registered bank accounts.

In February last year, the South African Reserve Bank imposed administration sanctions on commercial banks amounting to R125 million for non-compliance to Fica, and ordered remedial action.

Details: www.fic.gov.za