Absa Bank Fined R10M For Compliance Failures

The Prudential Authority (PA), responsible for enforcing compliance with the Financial Intelligence Centre Act 38 of 2001 (FIC Act), has imposed administrative sanctions on Absa Bank following a 2022 inspection.

The bank failed to meet key regulatory requirements, resulting in a R10 million fine, a reprimand, and two formal cautions.

Key Compliance Failures Leading to Sanctions

1. Inadequate Customer Due Diligence (CDD) & Enhanced Due Diligence (EDD)

   • Absa failed to properly screen four foreign prominent public officials (FPPOs) and two politically exposed persons (PEPs) linked to state-owned enterprises.

   • The bank also neglected enhanced due diligence on three domestic prominent influential persons (DPIPs) and five FPPOs.

   • Penalty: R7 million, a reprimand, and a caution.

2. Breach of FIC Act Directive 5 of 2019

   • 8,559 automated transaction monitoring alerts were not resolved within 48 hours.

   • Four non-reportable alerts were also delayed.

   • Two suspicious activity reports were closed after the 15-day deadline (violating Regulation 24(3)).

   • Penalty: R3 million and a caution.

Absa’s Response & Remedial Actions

The PA acknowledged Absa’s cooperation and confirmed the bank has taken corrective measures to address compliance gaps.

This enforcement action underscores the PA’s commitment to strict anti-money laundering (AML) controls and financial crime prevention.