The Prudential Authority (PA) has increased the number of sanctions it has imposed, but says this isn’t because of South Africa’s efforts to get off the Financial Action Task Force (FATF) grey list.
The PA forms part of the South African Reserve Bank (SARB) and acts as the nation’s banking and insurance regulator.
Over the last year, the PA has sanctioned several major banks in South Africa, which many have linked to the nation’s attempts to get off the grey list.
South Africa was placed on the grey list in 2023 due to flaws in its anti-money laundering and terrorist financing regulations. Being on the list severely hampers financial flows into and out of South Africa.
The PA has been working in tandem with several government agencies to help South Africa get off the listing, which has coincided with administrative sanction being imposed on the banks, including fines.
Capitec received a financial penalty of R56.25 million, of which R10.5 million was conditionally suspended for 36 months, due to multiple failures to comply with the Financial Intelligence Centre (FIC) Act.
Standard Bank received a financial penalty of R13 million for FIC failures, while Absa received a R10 million penalty.
More recently, HBZ received a R9 million fine, R1.5 million being conditionally suspended for two years. Citibank received a conditionally suspended R6 million fine.
The two international banks failed to comply with FIC Act, which was also the case for Bank of Taiwan, but the latter did not receive any financial penalty.
The PA flagged several issues in all the cases, but pointed to staff training deficiencies, customer due diligence gaps, and changes in key personnel without authorisation as being main problems.
Not linked to the grey list
Despite the rise and timing of the financial penalties, PA CEO and SARB Deputy Governor Fundi Tshazibana said that sanctions have nothing to do with South Africa’s greylisting.
She said the apparent increase in sanctions is more due to enhanced supervision from the PA itself.
She pointed out that many of the sanctions are rooted in historic non-compliance by the banks in 2021 and 2022—well before South Africa was put on the grey list in early 2023.
Similarly, various department heads from the PA told BusinessTech that South Africa’s exit from the grey list will not affect the number of sanctions. This could happen as early as October.
Officials are currently submitting information to the FATF, which will then conduct a “mini-audit” of the nation’s efforts to get off the grey list.
After the audit, the FATF will focus on South Africa’s compliance with international rules, while engaging with the private sector, SARS, SAPS and other entities to see if the financial ecosystem works well together.
Tshazibana said there cannot be any question marks over funds going into other jurisdictions.
Although the FATF influences the PA’s decisions, the authority said it has not changed the regulator’s behaviour regarding sanctions.
The PA also stressed that its oversight covers several laws and regulations not considered by the FATF, with some banks breaking licensing rules while others fail to follow set legislation.
It added that not every sanction is an indictment, nor does it always carry a fine.
Financial penalties may be the quickest thing to draw the eye, but some sanctions could simply be a directive to take remedial action.
The PA said it is not a profit-seeking entity and that sanctions are designed to ensure financial stability across South Africa’s financial markets.
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Updated: July 2025
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