The Prudential Authority of the South African Reserve Bank has levied administrative penalties amounting to R3 million on Discovery Bank for non-adherence to critical anti-money laundering regulations. Charged with enforcing compliance under the Financial Intelligence Centre Act, the authority conducted an examination in 2021 pursuant to section 45B of the legislation, which seeks to curb money laundering and terrorist funding. As reported by Business Day, the measures encompass four official warnings and a monetary fine of R3 million, with R1 million of that sum deferred conditionally for thirty-six months commencing 9 July 2025.
These actions arise from four principal areas of non-compliance. Initially, the bank did not promptly report twenty-four instances of dubious or atypical transactions or activities to the Financial Intelligence Centre, resulting in a warning and a R1 million penalty, half of which is postponed for thirty-six months. Secondly, shortcomings in the bank’s risk management and compliance framework led to lapses in staff training obligations; specifically, eighty-four out of one hundred and fifty-five new hires were not instructed within thirty days of joining, forty-seven out of one hundred and nine current employees missed their yearly refresher sessions within twelve months, and two out of six senior executives also experienced delays in training. This infraction drew another warning and a R1 million fine.
Further, in violation of Directive 5 of 2019, which mandates responses to automated transaction monitoring notifications within forty-eight hours, the bank neglected to address two thousand two hundred and eighty-one such alerts promptly, prompting a third warning and an additional R1 million penalty, with five hundred thousand rand suspended. Lastly, the institution fell short under section 42 by omitting to record explicit protocols and activation points for evaluating its risk management and compliance programme, and by neglecting to specify what qualifies as a business day for pinpointing reportable cash dealings as stipulated by the Act. Although no financial sanction was applied here, a formal admonition was issued.
The authority acknowledged the bank’s complete collaboration during the probe and its ongoing initiatives to rectify the pinpointed deficiencies and fortify internal safeguards. In a formal declaration, Discovery Bank reaffirmed its dedication to maintaining superior levels of regulatory adherence and openness consistently. According to Business Report, the review uncovered no indications that the bank had participated in or enabled operations linked to money laundering or other unlawful financial conduct, and all concerns flagged by the authority had been previously detected and corrected before the inspection began.
Since the evaluation period, the bank has substantially reinforced its compliance mechanisms, incorporating extensive improvements across technological systems, operational procedures, and oversight frameworks. As detailed on the South African Reserve Bank website, these sanctions underscore the authority’s commitment to upholding stringent standards in the financial sector to mitigate risks associated with illicit activities. This case forms part of a broader pattern of regulatory enforcement, with similar actions taken against other institutions to ensure robust anti-money laundering protocols.
Discovery Bank’s response, as conveyed through MyNewsDesk, emphasises proactive remediation and a forward-looking approach to compliance, potentially setting a benchmark for the industry amid heightened scrutiny following South Africa’s removal from the Financial Action Task Force greylist in 2025. The penalties highlight ongoing challenges in the banking sector to balance rapid digital expansion with rigorous regulatory demands, particularly in transaction monitoring and staff preparedness.