, RSK4804 ASSIGNMENT 1 2026 - UNIQUE NUMBER: 265691
DUE DATE: 29 MAY 2026
QUESTION 1
1.
Regulatory Compliance Risk
Standard Bank is exposed to significant regulatory compliance risk due to its failure to
adhere to key provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act). The
Prudential Authority found multiple breaches, including non-compliance with sections 21C,
23(c), 28, and 29. These provisions require accountable institutions to perform ongoing
customer due diligence, maintain proper records, and report suspicious and cash
transactions within strict timeframes. The fact that the bank failed to conduct due diligence
on certain clients over multiple years (2018–2019) demonstrates a sustained breakdown in
compliance processes rather than isolated negligence. Such failures indicate that regulatory
obligations were not effectively embedded into the bank’s operational framework, exposing
it to ongoing supervisory action and penalties from the Prudential Authority (SARB, 2025).
Legal and Statutory Enforcement Risk
The bank is also exposed to serious legal and enforcement risk because its conduct
constitutes direct breaches of statutory obligations under the FIC Act. Financial institutions
in South Africa are legally required to comply with anti-money laundering (AML) legislation,
and failure to do so empowers regulators to impose administrative sanctions, including
fines and formal cautions. In this case, Standard Bank received a R13 million penalty
alongside multiple cautions, indicating repeated violations rather than minor procedural
errors. The failure to timeously report thousands of suspicious transaction reports (STRs)
and cash transaction reports suggests systemic non-compliance, which increases the
DUE DATE: 29 MAY 2026
QUESTION 1
1.
Regulatory Compliance Risk
Standard Bank is exposed to significant regulatory compliance risk due to its failure to
adhere to key provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act). The
Prudential Authority found multiple breaches, including non-compliance with sections 21C,
23(c), 28, and 29. These provisions require accountable institutions to perform ongoing
customer due diligence, maintain proper records, and report suspicious and cash
transactions within strict timeframes. The fact that the bank failed to conduct due diligence
on certain clients over multiple years (2018–2019) demonstrates a sustained breakdown in
compliance processes rather than isolated negligence. Such failures indicate that regulatory
obligations were not effectively embedded into the bank’s operational framework, exposing
it to ongoing supervisory action and penalties from the Prudential Authority (SARB, 2025).
Legal and Statutory Enforcement Risk
The bank is also exposed to serious legal and enforcement risk because its conduct
constitutes direct breaches of statutory obligations under the FIC Act. Financial institutions
in South Africa are legally required to comply with anti-money laundering (AML) legislation,
and failure to do so empowers regulators to impose administrative sanctions, including
fines and formal cautions. In this case, Standard Bank received a R13 million penalty
alongside multiple cautions, indicating repeated violations rather than minor procedural
errors. The failure to timeously report thousands of suspicious transaction reports (STRs)
and cash transaction reports suggests systemic non-compliance, which increases the
