In an attempt to clarify ongoing speculation following Standard Bank and Nedbank’s move last week to sever ties with the Gupta-linked Oakbay Resources, the Banking Association of South Africa (Basa) on Thursday released a statement to account for the regulatory considerations that all banks needed to undertake when assessing client relationships.
Basa explained that South African banks were obliged to ensure that their clients abided by the regulations of the current Financial Intelligence Centre Act (Fica), including impending amendments to this Act, as well as anti-money-laundering regulations.
With this in mind, it was incumbent on all banks to conduct a detailed due diligence on clients, especially those who were in the public domain, said the association.
“Such due diligence is conducted on an ongoing basis to ensure the bank is aware of any significant changes in the affairs of the client, particularly to satisfy itself that a client is abiding by Fica regulations and anti-money-laundering regulations,” it said, adding that each bank had respect for client confidentiality and that the actions taken by other banks were always considered separately.
Basa also noted that banks were one of the most stringently regulated businesses in the country, as they held “public deposits in trust” and, therefore, had to conduct business in a way that did not put the economy at risk.
“A bank will take these matters into account when considering ongoing relationships with clients, and will take appropriate action, based on the circumstances.”
MD Cas Coovadia added that each bank would also consider “its own business model, risk models and other matters specific to that bank’s business in making such decisions”.