Pakistani-owned HBZ Bank sanctioned by South Africa's central bank

South Africa's central bank has sanctioned Durban-headquartered HBZ Bank, with roots in Pakistan, for violating the country's Money Laundering and Terrorist Financing Control Regulations. The South African Reserve Bank (SARB) cautioned HBZ not to repeat the conduct which led to the non-compliance with "suspicious and unusual transaction" reporting requirements of the Money Laundering and Terrorist Financing Control Regulations and for the failure to comply with training requirements of the Financial Intelligence Centre (FIC) Act.

HBZ escaped any financial penalties. It was one of the four smaller banks together with one of the big four banks -- Standard Bank -- which has come under the SARB scanner. The five banks are cooperating with the SARB and have agreed to undertake necessary measures to address the identified compliance deficiencies and control weaknesses.

The SARB found weaknesses in each of the banks' money laundering control measures following routine inspections. Standard Bank was fined a hefty 30 million rand (USD 2.1 million), of which 7.5 million rands was suspended for three years.

A penalty of 500,000 rands was imposed on Ubank. GroBank Limited (formerly known as The South African Bank of Athens Limited) was penalized five million rands and Bank of China's Johannesburg branch two million rands; both of which were suspended for three years.