The South African Reserve Bank's Prudential Authority imposed a reduced penalty of 400,000 South African rand on the local unit of India-based Bank of Baroda for noncompliance with certain provisions of the Financial Intelligence Centre Act.
In 2014, the regulator carried out an onsite inspection of the bank and found deficiencies related to compliance and weaknesses in controls to counter potential money laundering and terrorist financing. Bank of Baroda was ordered to rectify the weaknesses, which the lender assured had been fixed.
A follow-up inspection in 2016, however, found that some deficiencies in controls remained, and Bank of Baroda was subsequently slapped with a combined financial penalty of 11 million rand.
Following an appeal by Bank of Baroda, the Appeal Board reduced the fine to 400,000 rand, which a South African court upheld after the lender lodged a separate appeal to review the board's decision.
Bank of Baroda has paid the fine imposed over its failure to comply with the cash threshold reporting requirement of the FIC Act, the regulator noted.
As of Aug. 6, US$1 was equivalent to 14.97 South African rand.