Capitec Bank, one of South Africa’s most widely used retail banks, has been hit with R28 million in administrative fines after the Prudential Authority identified shortcomings in the bank’s compliance with the country’s financial intelligence laws.
Last Friday, the Prudential Authority (PA) said the sanctions followed an inspection conducted at Capitec in 2023 as part of its supervisory responsibilities under the Financial Intelligence Centre Act (FICA).
The regulator imposed five cautions on the bank, instructing it not to repeat the conduct that resulted in the breaches, as well as financial penalties totalling R28 million.
Of the total penalty, R5.5 million has been conditionally suspended for 36 months, starting from 13 October 2025.
At the heart of the regulator’s findings were shortcomings in Capitec’s customer due diligence processes.
The PA found that the bank had failed to conduct adequate customer due diligence on sampled client files. This resulted in a R10 million penalty, with R3 million conditionally suspended for 36 months.
The regulator emphasised that customer due diligence is an important part of the financial system’s safeguards because banks are required to establish and maintain appropriate information about their customers and understand the nature and purpose of their banking relationships.
The regulator also found that Capitec had failed to conduct adequate enhanced due diligence on sampled client files.
Enhanced due diligence involves applying additional scrutiny where a customer or transaction presents higher risks. For this finding, the PA imposed a R5 million penalty, of which R1 million was conditionally suspended for 36 months.
A further R5 million penalty was imposed after the PA found shortcomings in Capitec’s ongoing due diligence on sampled client files. Again, R1 million was conditionally suspended for 36 months.
The findings relate specifically to the bank’s compliance with provisions of the FIC Act and the effectiveness of its due diligence processes identified during the PA’s inspection.
The PA’s action highlights the stringent regulatory obligations imposed on banks to maintain effective systems for identifying and monitoring customers and managing financial-crime risks.
For Capitec, a bank that has built a large retail customer base around its accessible banking model, the sanctions underscore the importance of ensuring that its internal compliance systems keep pace with the scale of its operations.
The regulator said the administrative sanctions were imposed because of Capitec’s non-compliance with specific provisions of the FIC Act.
