VBS Mutual Bank fined R2,5mln for suspicious transaction

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The Reserve Bank has fined the VBS Mutual Bank R2.5 million for failing to report a suspicious transaction related to a R25 000 deposit to the Financial Intelligence Centre, as well as failing to identify and verify customer’s details.

This is according to the Reserve Bank’s latest Annual Bank Supervision Report which Deputy Governor, Kuben Naidoo, presented at 2017 Annual Banking Supervision Report in Johannesburg on Tuesday.

The report however indicates that R2million of the penalty fee will be suspended for a year. Naidoo says a forensic investigation headed by Senior Council Terry Motau will look into whether any fraud took place at the bank.

Naidoo says they have established that the liquidity problems at the bank are more severe than they’d initially anticipated.

Naidoo made the announcement at the briefing of the 2017 Annual Banking Supervision Report in Johannesburg.

The Reserve Bank has placed the VBS Mutual Bank under curatorship to nurse it back to financial health and to protect depositors’ interests.

Naidoo says the curator could not rely on the VBS’s 2017 audited financials as they did not reflect the bank’s true financial position.

“We announced on the day of curatorship that retail deposits of up to R50 000 would be protected. We also announced that the curator will recover the finances. Since then there has been a number of developments.

“The first development is the curator found that the liquidity position of the bank was actually much worse that we thought at the time of curatorship, the second thing that we found was that the curator was not able to rely on the 2017 audited financial statements, and withdrew the financial statements,” Naidoo explained.

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