Discovery Bank Fined R3 Million for Anti-Money Laundering Compliance Failures
The Reserve Bank’s Prudential Authority (PA) has issued administrative sanctions totaling R3 million to discovery bank for breaches of anti-money laundering regulations under the Financial Intelligence Center Act (Fica). The penalties stem from an inspection conducted in 2021, focused on the bank’s compliance systems designed to prevent money laundering and the financing of terrorism.
The sanctions include four formal cautions and a R3 million financial penalty, with R1 million conditionally suspended for 36 months from July 9th.
The PA identified four key areas of non-compliance:
* delayed Suspicious Transaction Reporting: Discovery Bank failed to promptly submit 24 suspicious transaction reports to the Financial Intelligence Centre, resulting in a caution and a R1 million penalty (R500,000 suspended).
* Insufficient Employee Training: The bank violated section 43 of Fica by failing to meet its training obligations. Specifically,84 of 155 new hires weren’t trained within 30 days,47 of 109 existing staff missed annual refresher training,and two of six senior managers were not trained in a timely manner. This led to a caution and a R1 million fine.
* Transaction Monitoring Delays: Discovery Bank failed to respond to 2,281 system-generated transaction monitoring alerts within the required 48-hour timeframe,as mandated by Directive 5 of 2019. this resulted in a caution and a R1 million fine (R500,000 suspended).
* Inadequate risk management Documentation: The bank breached section 42 by lacking documented procedures and trigger events for reviewing its Risk Management and Compliance Program (RMCP). It also failed to define “business day” for reportable cash transactions. A formal caution was issued for this.
The PA acknowledged discovery Bank’s full cooperation during the examination and its efforts to address the identified gaps and strengthen internal controls.
Discovery Bank stated it is “fully committed to upholding the highest standards of regulatory compliance and openness.” The bank emphasized that the inspection found no evidence of involvement in illicit financial activities and that all identified issues were already being addressed before the inspection began. Furthermore, Discovery Bank highlighted significant improvements to its systems, processes, and governance structures since the inspection period.
Update (November 7, 2025): This story has been updated to include a comment from Discovery Bank.