UPDATE: Financial regulations put strain on NPOs
Destiny House orphanage was recently left without funds for almost a week after FNB's FICA Compliance Department froze its bank account.
NON-PROFIT organisations banking with First National Bank (FNB) have reported account closures or freezing of funds without prior warning, leaving the organisations unable to function and having to borrow money to make essential payments.
Destiny House orphanage in Mtubatuba was recently left without funds for almost a week after FNB’s FICA (Financial Intelligence Centre Act) Compliance Department froze its bank account, citing outstanding FICA documents as the reason. After numerous telephone calls the bank allegedly admitted its mistake and unfroze the account.
Meanwhile, Businesses Against Crime Zululand based in Empangeni, has been battling to rectify its account closure for the past four weeks.
Executive Manager Dave Whittaker said their account closure was owing to a failure of communication.
On requiring new or updated FICA documents, the relevant FNB department failed to contact Whittaker or one of the other two listed signatorie.
Instead, a manager who left the organisation 12 years ago, and whose contact details have changed, was their point of contact.
‘After spending almost an hour on the telephone to the FNB FICA Compliance Department, I was told paperwork was outstanding and I would receive an email saying what needs to be submitted,’ said Whittaker.
‘That email came a week later, but no apology for the lack of communication or service was forthcoming’.
Furthermore, Whittaker says he has posted complaints on Hellopeter, none of which has received a reply.
While the local bank branch manager has attempted to help, the matter lies solely with FNB’s centralised FICA Compliance Department.
Unable to comment on these specific cases owing to customer confidentiality, FNB spokesperson Marcel Klaassen, said,
‘First National Bank (FNB) takes several proactive measures to ensure clients are contacted, especially in relation to banking regulation and compliance’.
‘Although we often err on the side of caution, no account would be frozen erroneously’.
Klaassen said FNB regularly reviews its FICA compliance. Non-compliant accounts are identified and outstanding documents are requested from account holders.
‘Should outstanding documents not be forthcoming, FNB will have no option but to restrict the activities on such non-compliant accounts,’ said Klaassen.
The question of compensation for these two organisations which had to borrow money for essential payments was not addressed.
