The South African Reserve Bank (SARB) says there is no link between its recent sanctioning of VBS Bank and the missing N$200 million invested in the bank by SME Bank.
According to Bank of Namibia (BoN) investigators VBS was the initial destination of the missing N$200 million, before it was invested elsewhere. BoN has ruled out the possibility of recovering the money.
The SARB early this month imposed administrative sanctions on VBS Mutual Bank for non-compliance with the Financial Intelligence Centre Act 38 of 2001. The reserve bank directed VBS to take remedial actions, a position which fuelled speculation in Namibia that the sanctions were as a result of the missing SME Bank money.
Section 45B of the Financial Intelligence Centre Act (FIC Act) gives the Bank Supervision Department of the South African Reserve Bank the powers to conduct anti-money laundering/combating the financing of terrorism compliance inspections (not investigations),” Denzel Bostander, Deputy Registrar of Banks at the SARB told the Windhoek Observer this week, adding that the administrative sanctions imposed were on VBS’s non-compliance with certain provisions of the Financial Intelligence Centre Act and did not constitute an outcome of an investigation into matters relating to SME Bank of Namibia.
He said the purpose of the inspection was to assess VBS’s compliance with the FIC Act and to assess the effectiveness of the bank’s AML/CFT controls to prevent the bank from being abused for money laundering and terrorist financing purposes.
“It should be noted that the administrative sanctions were not imposed because VBS was found to have facilitated transactions involving money laundering or the financing of terrorism, but because of weaknesses in VBS’s control measures,” he said.
The administrative sanctions imposed on VBS attract a financial penalty of R2.5 million and a directive to take remedial action which includes identifying and verifying customers’ details and complying with cash threshold reporting requirements.
BoN on its part has refused to comment on the saga, saying the matter is subject to an ongoing judicial process in the High Court.
The High Court has since appointed Ian Mclaren and David Bruni as provisional liquidators of the SME Bank.