The Reserve Bank’s Prudential Authority (PA) has slapped Discovery Bank with administrative sanctions totalling R3m for failing to meet key anti-money laundering compliance rules.
The PA is tasked with ensuring compliance under the Financial Intelligence Centre Act (Fica).
The penalties follow a 2021 inspection into the bank’s compliance systems, carried out under section 45B of the Fica, which aims to prevent money laundering and the financing of terrorism.
The sanctions include four formal cautions and a financial penalty of R3m, of which R1m is conditionally suspended for 36 months from July 9.
The administrative action stems from four key compliance failures:
Delayed reporting of suspicious transactions: Discovery Bank failed to timeously submit 24 suspicious and unusual transaction or activity reports to the Financial Intelligence Centre. For this, the PA imposed a caution and a R1m penalty, half of which is suspended for 36 months.
Training failures under its risk programme: The bank was found in breach of section 43 for not meeting its own training obligations under its Risk Management and Compliance Programme (RMCP). Specifically, 84 of 155 new employees were not trained within 30 days of appointment, 47 of 109 existing staff did not receive annual refresher training within a year, and two of six senior managers also failed to receive timely training. This attracted another caution and R1m fine.
Transaction monitoring breaches: Under Directive 5 of 2019, Discovery Bank was required to respond to system-generated transaction monitoring alerts within 48 hours. The bank failed to act on 2,281 such alerts in time. The PA again issued a caution and fined the bank R1m, with R500,000 of that amount suspended.
Inadequate risk management documentation: Lastly, the bank breached section 42 by failing to document specific procedures and trigger events for reviewing its RMCP. It also did not define what constitutes a “business day” for identifying reportable cash transactions, as required by the Act. While no fine was issued for this, a formal caution was recorded.
The PA noted that Discovery Bank had cooperated fully with the investigation and was working to remedy the identified compliance gaps and strengthen its internal controls.
Discovery Bank said in a statement it is “fully committed to upholding the highest standards of regulatory compliance and transparency at all times”.
“Importantly, the inspection found no evidence of Discovery Bank being involved in or facilitating transactions related to money laundering or other illicit financial activities. It is also important to note that all findings raised by the PA had already been identified and remediated prior to the commencement of the inspection.”
The bank said since the inspection period, compliance operations had been significantly strengthened, “with substantive enhancements across systems, processes and governance structures”.
Update: November 7 2025
This story has been updated with Discovery Bank’s comment.
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