VBS Mutual Bank Fined for Money Laundering Violations

In the 2017  South African Reserve Bank (SARB) annual report that was released last month, it was detailed that VBS Mutual Bank was fined R2.5-million by the SARB for failing to comply with regulations aimed at preventing money laundering and the financing of terrorism.

According to the report, VBS failed to identify and verify their customers’ details and, because VBS did not have proper control methods in place to report suspicious and unusual activities, the bank also failed to report cash transactions that totaled over R25,000 to the Financial Intelligence Centre (FIC).

As a result of these violations, the bank was put under curatorship as of March, and fined R2.5-million with R2-million suspended for one year.  VBS was also instructed to take action to remediate the failings in its anti-money laundering (AML) controls.  Since VBS has been under curatorship, cases of mismanagement and even possible corruption have arisen which has led to a forensic investigation into its affairs.

China Construction Bank Corporation (CCBC) was also mentioned in the report as having been fined R75-million with R20-million suspended for three years for also failing to report suspicious cash transactions to the FIC due to its weak AML controls as well as failing to properly identify and verify its customers’ details.


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