Discovery Bank hit with R3 million fine and administrative sanctions

The Reserve Bank’s Prudential Authority (PA) has imposed administrative sanctions on Discovery Bank as a result of its non-compliance with certain provisions of the Financial Intelligence Centre (FIC) Act.

This follows an inspection conducted on Discovery Bank in 2021, which the PA is mandated to do as part of the enforcement of compliance with the FIC Act, the regulator said.  

The administrative sanctions imposed on the bank consist of four cautions not to repeat the conduct which led to the non-compliance.

This was coupled with a financial penalty totalling R3 million, of which R1 million is conditionally suspended for a period of 36 months as from 9 July 2025.

These administrative sanctions stem from the following non-compliance by Discovery Bank –

1. Discovery Bank failed to timeously report 24 Suspicious and Unusual Transaction Reports or Suspicious and Unusual Activity Reports to the FIC.

The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R1 million, of which R500,000 is conditionally suspended for a period of 36 months.

2. Discovery Bank failed to provide training as prescribed by its Risk Management and Compliance Programme (RMCP) in that –

• 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 period of a year
• 2 out of 6 of its senior management had not received training within 30 days of being appointed

The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R1 million.

3. Discovery Bank failed to timeously attend 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 R1 million, of which R500,000 is conditionally suspended for a period of 36 months.

4. Discovery Bank failed to comply with section 42 of the FIC Act, in that it failed to – 

• Provide evidence that it had documented the step-by-step working method/s and/or listed the trigger events that would require the bank to review its RMCP
• Align its RMCP to define a business day for the purposes of identifying cash transactions to be reported in terms of section 28, read with section 42 of the FIC Act

The PA imposed a caution not to repeat the conduct which led to the non-compliance.

The regulator said Discovery Bank has cooperated with the PA to undertake the remedial action required to address the identified compliance deficiencies and control weaknesses.

In a separate statement, the bank said it is fully committed to upholding the highest standards of regulatory compliance and transparency at all times, acknowledging 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, in particular, related to training and transaction reporting timeframes,” Discovery Bank said.

“Importantly, the inspection found no evidence of Discovery Bank being involved in or facilitating transactions related to money laundering or other illicit financial activities.”

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

“Since the inspection period, compliance operations have been significantly strengthened, with substantive enhancements across systems, processes, and governance structures.”

Discovery Bank said the publication of the sanction notice from the PA brings the matter to a close.