Regulatory Alerts2022-06-15
Guidance on Correspondent Banking Risk Management Practices
The South African Reserve Bank issues this guidance note to establish mandatory anti-money laundering and counter-terrorist financing risk management standards for banks and controlling companies engaging in cross-border correspondent banking relationships. Institutions must implement robust due diligence procedures, secure senior management approval for new relationships, strictly prohibit dealings with shell banks, and apply enhanced monitoring to nested relationships and payable-through accounts based on a risk-based approach. The framework aligns domestic obligations with FATF Recommendations and the Financial Intelligence Centre Act, requiring continuous transaction monitoring, accurate payment information transmission, and regular reassessment of respondent institutions to mitigate proliferation financing and market abuse risks.