The South African Reserve Bank’s Prudential Authority (PA) has imposed administrative sanctions on Discovery Bank Limited (DBL) following a 2021 inspection that revealed multiple breaches of the Financial Intelligence Centre (FIC) Act. The PA, which is responsible for supervising and enforcing compliance with the FIC Act, found that Discovery Bank failed to meet several key regulatory obligations designed to combat financial crime and ensure institutional accountability.
The PA identified three major areas of non-compliance:
- Failure to Report Suspicious Transactions
Discovery Bank did not timeously report 24 suspicious and unusual transaction reports to the Financial Intelligence Centre, as required under Section 29, read with Section 42 of the FIC Act and Regulation 24(3).- Sanction: A caution not to repeat the conduct and a R1 million fine, with R500,000 conditionally suspended for 36 months from 9 July 2025.
- Inadequate Staff Training
The bank failed to comply with Section 43 of the FIC Act, which mandates training under its Risk Management and Compliance Programme (RMCP). The PA found:- 84 out of 155 new employees had not received training within 30 days of appointment.
- 47 out of 109 employees missed annual refresher training.
- 2 out of 6 senior managers did not receive training within 30 days of appointment.
- Sanction: A caution and a R1 million fine.
- Failure to Address Transaction Monitoring Alerts
Under Directive 5/2019, Discovery Bank failed to respond to 2,281 alerts generated by its automated transaction monitoring system within the required 48-hour window.- Sanction: A caution and a R1 million fine, with R500,000 conditionally suspended for 36 months.
- Deficiencies in RMCP Documentation
The PA also found that Discovery Bank had not properly documented the step-by-step procedures or trigger events for reviewing its RMCP. Additionally, the bank failed to define a “business day” for identifying reportable cash transactions under Section 28, read with Section 42 of the FIC Act.- Sanction: A caution not to repeat the conduct.
The PA emphasized that Discovery Bank has cooperated fully with the investigation and is undertaking remedial actions to address the identified compliance gaps and control weaknesses. Discovery Bank joins a growing list of financial institutions sanctioned by the PA for FIC Act violations. Other recent cases include eZaga Remit, HBZ Bank Limited, Citibank, Bank of Taiwan, and major South African banks such as Capitec, Standard Bank, and Absa.
