RSK4802
EXAM PACK
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Page 3 of 13 RSK4802
Confidential Jan/Feb 2024
Question 1 [20 marks]
The South Reserve Bank (the Bank) has fined Capitec and the local branch of Deutsche Bank a
combined total of R25m in 2016 for shortcomings in the systems they have in place to combat
money laundering. This was reported in the Bank’s Banking Supervision Departments’ annual
report and in the Business Day newspaper.
The Bank also announced that deputy governor Kuben Naidoo would take over as registrar of
banks from Rene van Wyk, who will retire as registrar at the end of this year. Naidoo, who will serve
in both the deputy governor and registrar roles, helping to facilitate the transition to the new Twin
Peaks regulatory system.
The Bank Supervision Department is responsible for ensuring that banks have systems and
measures in place to comply with the provisions of the Financial Intelligence Centre Act (FICA) on
money laundering and terror financing.
The Bank emphasised the decision to impose administrative sanctions on Deutsche Bank and
Capitec "was not based on any evidence that Deutsche Bank or Capitec facilitated transactions
relating to money laundering and/or financing of terrorism activities."
However, Capitec was fined R5m for failing to report cash transactions above R24,999 to the
Financial Intelligence Centre in line with the legislation and it was directed to take remedial action.
Deutsche Bank’s "know your customer" measures were inadequate and it was fined R10m for this
and was directed to address deficiencies in its controls and systems related to detecting property
related to terrorism. The Bank confirmed in February 2015 that the Reserve Bank had fined it
following a routine inspection that had found inadequacies in Deutsche’s ‘know your customer’’
processes and other FIC related controls.
Extracted from Business Day 25 May 2016
1.1 Read the report from the Business Day and identify any four possible risks that the banks faced
with the Financial Intelligence Centre Act. (4)
, lOMoARcPSD|18222662
Page 4 of 13 RSK4802
Confidential Jan/Feb 2024
1.2 Give reasons from the article why the Bank imposed administrative fines on Capitec and
Deutsche Bank. (3)
, lOMoARcPSD|18222662
Page 5 of 13 RSK4802
Confidential Jan/Feb 2024
1.3 Suppose you are a compliance officer at Deutsche Bank. Explain to the compliance staff
members what is required for the bank to comply with the “know your customer” (KYC)
legislative requirements under FICA. (3)
EXAM PACK
, lOMoARcPSD|18222662
Page 3 of 13 RSK4802
Confidential Jan/Feb 2024
Question 1 [20 marks]
The South Reserve Bank (the Bank) has fined Capitec and the local branch of Deutsche Bank a
combined total of R25m in 2016 for shortcomings in the systems they have in place to combat
money laundering. This was reported in the Bank’s Banking Supervision Departments’ annual
report and in the Business Day newspaper.
The Bank also announced that deputy governor Kuben Naidoo would take over as registrar of
banks from Rene van Wyk, who will retire as registrar at the end of this year. Naidoo, who will serve
in both the deputy governor and registrar roles, helping to facilitate the transition to the new Twin
Peaks regulatory system.
The Bank Supervision Department is responsible for ensuring that banks have systems and
measures in place to comply with the provisions of the Financial Intelligence Centre Act (FICA) on
money laundering and terror financing.
The Bank emphasised the decision to impose administrative sanctions on Deutsche Bank and
Capitec "was not based on any evidence that Deutsche Bank or Capitec facilitated transactions
relating to money laundering and/or financing of terrorism activities."
However, Capitec was fined R5m for failing to report cash transactions above R24,999 to the
Financial Intelligence Centre in line with the legislation and it was directed to take remedial action.
Deutsche Bank’s "know your customer" measures were inadequate and it was fined R10m for this
and was directed to address deficiencies in its controls and systems related to detecting property
related to terrorism. The Bank confirmed in February 2015 that the Reserve Bank had fined it
following a routine inspection that had found inadequacies in Deutsche’s ‘know your customer’’
processes and other FIC related controls.
Extracted from Business Day 25 May 2016
1.1 Read the report from the Business Day and identify any four possible risks that the banks faced
with the Financial Intelligence Centre Act. (4)
, lOMoARcPSD|18222662
Page 4 of 13 RSK4802
Confidential Jan/Feb 2024
1.2 Give reasons from the article why the Bank imposed administrative fines on Capitec and
Deutsche Bank. (3)
, lOMoARcPSD|18222662
Page 5 of 13 RSK4802
Confidential Jan/Feb 2024
1.3 Suppose you are a compliance officer at Deutsche Bank. Explain to the compliance staff
members what is required for the bank to comply with the “know your customer” (KYC)
legislative requirements under FICA. (3)
