According to a recent press report, The South Reserve Bank $($hereafter $$The Bank$)$ fined Capitec

and the local branch of Deutsche Bank a combined total of R$25$m last year for shortcomings in

the systems they have in place to combat money laundering, the Bank said in the annual report

of its Bank Supervision Department.

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. Mr Naidoo will serve

in both the deputy governor and registrar roles, in order to facilitate the transition to the new Twin

Peaks regulatory system.

The Bank$$s 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

$($hereafter 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." Nevertheless, Capitec was

fined R$5$m for failing to report cash transactions above R$24,999\mathrm{.}00$ 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 consequently, it was

fined R$10$m 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 fines is the

result of a routine inspection that identified inadequacies in Deutsche$$s $$know your customer$$

processes and other FIC related controls.

$1\mathrm{.}1$ Read the report from the Business day and identify any four possible risks that the banks$$

face for non$-$compliance with the Financial Intelligence Centre Act.