Unmasking complicity of banks in corruption

LOCAL and international banks have been accused of enabling criminal syndicates to funnel illicit funds without proper scrutiny or reporting of suspicious transactions.

- BONGANI HANS

The allegations came from the Public Service and Commercial Union of South Africa (PSCU).

The PSCU was of the view that banks only close suspicious accounts and blacklist corrupt companies after profiting significantly from illicit transactions, often when it's too late to prevent the financial damage.

PSCU secretary general Tahir Maepa claimed that banks were not being held accountable for their role in facilitating corruption. He has urged Parliament to summon bank CEOs to explain their failure to detect corrupt money despite their “sophisticated systems”.

Maepa claimed that criminal syndicates, such as those implicated in the R2 billion fraud at Gauteng’s Tembisa Hospital, could not have succeeded without bank transactions.

He accused banks of deliberately neglecting their FICA obligations by ignoring large deposits without questioning the sources of funds.

Maepa argued that banks, while purportedly concerned about reputation when closing accounts of black entrepreneurs and organisations, were complicit in aiding criminal syndicates.

He further claimed that despite FICA legally obliging banks to report suspicious transactions, billions flowed from a public hospital to a network of front companies and into luxury assets without triggering alarms, calling this “complicity, not oversight”.

However, the Banking Association South Africa (BASA), which represents over 30 commercial banks operating in South Africa, said it was not aware of Maepa’s allegations as it does not have direct access to each bank’s dealings with depositors.