Discovery Bank in hot water for non-compliance with the law

Discovery Bank is the latest institution to have sanctions imposed against it by the Prudential Authority for non-compliance with key provisions of the Financial Intelligence Centre Act.

This follows a 2021 inspection conducted on Discovery Bank.

The administrative sanctions carry a financial penalty totalling R3 million with R1 million of that conditionally suspended for a period of 36 months.

The Prudential Authority said Discovery Bank failed to report 24 suspicious and unusual transaction activity reports on time.

The bank was also found to have failed to provide training to some of its employees – including 84 out of 155 of its new employees who had not received training within 30 days of being appointed.

Two out of six of its senior management had also not received training within 30 days of being appointed.

It says discovery bank failed to address more than 2,000 automated transaction monitoring alerts within 48 hours and has some weaknesses in its risk management and compliance programme.

The administrative sanctions by the Prudential Authority also consist of four cautions not to repeat the conduct which led to the non-compliance.

The Prudential Authority said Discovery Bank has committed to the remedial action required to address the identified compliance deficiencies and control weaknesses.

The latest sanctions are part of the Prudential Authority’s efforts to tighten the country’s anti-money laundering and counter-terrorism financing framework.