Discovery Bank faces R3 million fine from PA for compliance failures, lack of staff training

The Prudential Authority (PA) on Friday imposed administrative sanctions and fines on Discovery Bank for failing to timeously report some suspicious transactions and for inadequate staff training.

The PA supervises and enforces compliance by banks and other financial institutions with the provisions of the Financial Intelligence Centre Act (FIC Act).

“The PA has imposed administrative sanctions on Discovery Bank (DBL) as a result of its non-compliance with certain provisions of the FIC Act, following an inspection conducted on DBL in 2021…” the PA said in a statement on Friday.

The administrative sanctions consist of four cautions not to repeat the conduct that led to the non-compliance, and a financial penalty totaling R3 million, of which R1m was conditionally suspended for a period of 36 months from July 9, 2025.

These administrative sanctions stemmed from the bank's failure to timeously report 24 Suspicious and Unusual Transaction Reports, or Suspicious and Unusual Activity Reports, to the Financial Intelligence Centre.

In this instance, the PA imposed a caution not to repeat the conduct and a financial penalty of R1m, of which R500 000 was conditionally suspended for a period of 36 months.

Discovery Bank also failed to comply with the FIC Act as it did not provide training as prescribed by its Risk Management and Compliance Programme (RMCP).

This was because 84 out of 155 of its new employees had not received training within 30 days of being appointed; 47 out of 109 of its employees had not received annual refresher training within a year; and 2 out of 6 of its senior management had not received training within 30 days of being appointed.

For these cases, the PA imposed a caution not to repeat the conduct and a R1m financial penalty.

The PA stated that Discovery Bank also failed to comply with the FIC Act Directive 5/2019, in that it had not timeously attended to 2 281 of its automated transaction monitoring system alerts within the prescribed period of 48 hours.

The PA imposed a caution not to repeat the conduct that led to the non-compliance, and a financial penalty of R1m, of which R500 000 was conditionally suspended for 36 months.

The bank also failed to provide evidence that it had documented the step-by-step working methods and/or listed the trigger events, that would require the bank to review its RMCP and align its RMCP to define a business day for identifying cash transactions to be reported under the FIC Act.

The PA imposed a caution on the bank not to repeat the conduct that led to the non-compliance.

In response, DBL said it was committed to upholding "the highest standards of regulatory compliance and transparency at all times," and it acknowledged the administrative sanctions imposed by the PA.

“The inspection, which covered the period from 1 July 2019 to 31 May 2021, identified non-compliance with certain administrative provisions of the FIC Act, particularly related to training and transaction reporting timeframes. Importantly, the inspection found no evidence of Discovery Bank being involved in or facilitating transactions related to money laundering or other illicit financial activities,” the bank said.

It also noted that all findings raised by the PA “had already been identified and remediated prior to the commencement of the inspection.”

“Discovery Bank takes its regulatory obligations extremely seriously. Since the inspection period, compliance operations have been significantly strengthened, with substantive enhancements across systems, processes, and governance structures,” it added.

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