Discovery Bank has been sanctioned by the South African Reserve Bank’s Prudential Authority (PA) for multiple violations of the Financial Intelligence Centre (FIC) Act, including failures to report suspicious transactions and provide employee training on financial crime compliance.
The PA — responsible for supervising and enforcing compliance with the FIC Act — said Discovery Bank breached several key provisions following an inspection conducted in 2021.
Suspicious Transactions Not Reported
According to the Authority, Discovery Bank failed to timeously report 24 suspicious and unusual transactions to the Financial Intelligence Centre (FIC), a serious breach of the Act’s anti-money laundering and anti-terror financing framework.
As a result, the Prudential Authority imposed administrative sanctions on the bank, including four formal cautions and a R3 million penalty, of which R1 million is suspended for 36 months starting from 9 July 2025.
Failure to Train Employees on Compliance
The PA also found that Discovery Bank failed to meet FIC Act training obligations, which require all accountable institutions to ensure employees are properly trained to detect and report financial irregularities.
The inspection revealed that:
84 out of 155 new employees had not received compliance training within 30 days of appointment.
47 out of 109 employees did not complete annual refresher training.
2 out of 6 senior managers had not received training within 30 days of their appointments.
This lack of training was deemed a significant control weakness in the bank’s Risk Management and Compliance Programme (RMCP).
Discovery Bank Responds
In a statement, the Prudential Authority confirmed that Discovery Bank cooperated fully with the investigation and has since implemented remedial measures to correct the deficiencies identified.
The Authority said, “Discovery Bank has undertaken the required actions to address the compliance weaknesses and ensure full adherence to the FIC Act moving forward.”
Growing List of Sanctioned Banks
Discovery Bank joins a growing list of local and international banks penalised by the PA in recent months for FIC Act non-compliance.
Earlier this year, HBZ Bank Limited, Citibank, and the Bank of Taiwan were all hit with administrative sanctions for similar breaches.
Meanwhile, major local banks — including Capitec, Standard Bank, and Absa — have also faced fines and reprimands for inadequate reporting and compliance controls.
On the same day as Discovery Bank’s penalty, the Prudential Authority also sanctioned eZaga Remit (eZI Remit), an international remittance group, for failing to implement proper anti-money laundering systems.
Regulatory Crackdown on Financial Institutions
The latest enforcement actions form part of a broader crackdown by the South African Reserve Bank to strengthen anti-money laundering and counter-terrorism financing frameworks ahead of ongoing FATF (Financial Action Task Force) evaluations.
The Prudential Authority reiterated its stance that “all accountable institutions must ensure effective internal controls, robust compliance frameworks, and continuous staff training to protect South Africa’s financial system from abuse.”
