The June 30 deadline for banks to verify the identities of their clients was deferred on Thursday to an array of new cut-off points starting on December 31.
Finance Minister Trevor Manuel said banks would have to confirm the identities of their highest risk customers by the end of the year and banks would themselves determine the profile of this group.
By May 31 next year, banks would have had to verify the details of at least 50% of their clients, the minister told reporters in Pretoria.
The process would come to an end on September 30, 2006 — by when the identities of low risk bank clients, the last group, had to be verified. This group included people with no more than R25 000 in their accounts at any given time, and who deposited no more than R5 000 or withdrew a maximum of R15 000 a day.
Banks and the political opposition hailed the announcement as a fair compromise.
”We welcome Minister Manuel’s pragmatic approach to what has become a complex and sensitive situation,” Standard Bank said in a statement.
The reporting requirements, which involved verifying the details of about 17-million bank clients, were envisaged in regulations aimed at curbing money laundering through South African banks.
The changes were adopted after considering more than 50 requests for a postponement Manuel said.
But the often-maligned requirement for clients’ residential addresses to be verified alongside their identity documents would not be dropped.
”Mere reliance on ID numbers is clearly inadequate, partly because the issue of ID numbers itself has been the subject of dispute because of theft of blank ID books and so on,” Manuel said.
The compliance of banks varied widely, with several of the smaller institutions 100% compliant and some of the bigger ones ”substantially less so”, he added.
Some were dragged ”kicking and screaming”, and others wrongly regarded the regulations as the imposition of a duty they did not previously have.
Manuel said banks accepted the new framework and understood the importance of avoiding a last-minute rush.
”If anybody still feels the need to kick and scream, we might have to at least kick — we don’t have to scream.”
The maximum penalty for non-compliance was 15 years or R10-million.
Standard Bank endorsed the new approach, saying it would involve minimum inconvenience to customers.
The bank committed itself to handling the process in an orderly and responsible manner.
First National Bank also welcomed the extension, but urged its customers not to procrastinate in confirming their details.
The Democratic Alliance said neither an ongoing dispute nor blind adherence to the June 30 deadline would have served the interests of banks or their clients.
”This announcement … is not only a tribute to the maturity with which the parties concerned have concluded this matter, but will also give considerable relief to millions of banking clients who have not yet subjected themselves to the verification process.”
According to other deadlines outlined on Thursday, every licensed bank had to supply the SA Reserve Bank with a complete risk framework by July 31.
By October 31, they had to have identified all trusts, partnerships and the top 20% of private and corporate clients — those responsible for the bulk of transactions. They also had to report on progress quarterly.
Brokers and investment managers would have to report by October 31 on the verification of partnerships and trusts and the top 20%, by transaction value, of their clients. – Sapa