Al Baraka Bank Limited, South Africa’s only fully-fledged, dedicated Islamic bank, has been sanctioned by the South African Reserve Bank’s Prudential Authority (PA) for breaching provisions of the Financial Intelligence Centre Act (FIC Act).

The sanctions, announced on September 11, 2026, follow an inspection conducted by the PA in 2021 and highlight shortcomings in its reporting of cash and suspicious transactions, as well as deficiencies in its risk management and compliance programme.

Al Baraka Bank fined R1.6 million for compliance failures

According to the Prudential Authority (PA), Al Baraka was handed three cautions and financial penalties totalling R1.6 million ($99,150), of which R440,000 ($27,280) was conditionally suspended for 36 months from June 10, 2024.

The PA imposed a R100,000 ($6,200) penalty, including R40,000 ($2,480) conditionally suspended, after finding that Albaraka failed to report 232 Cash Threshold Reports and/or Aggregated Cash Threshold Reports on time.

The bank was also fined R500,000 ($31,000) after failing to timeously submit 144 Suspicious Transaction Reports and/or Suspicious Activity Reports. The largest penalty of R1 million ($62,001), of which R400,000 ($24,800) was conditionally suspended for 36 months, related to deficiencies in Albaraka’s Risk Management and Compliance Programme.

Earlier Albaraka sanction overturned on appeal

The PA found that the bank had failed to adequately document the rationale behind risk factors and assigned risk weightings, identify trigger events that could require changes to customer risk ratings, and document prohibited industries, activities and business relationships.

The regulator also identified shortcomings in Albaraka’s consideration of geographic risk in its money laundering and terrorist financing risk assessment, as well as failures relating to the review and approval of its compliance programme and associated policy documents.

The bank was further found to have shortcomings in implementing its compliance programme in relation to customer due diligence, cash-threshold reporting and suspicious-transaction reporting obligations. Albaraka has cooperated with the Prudential Authority and has remediated the compliance deficiencies and control weaknesses identified by the regulator.

The latest action underscores the importance of effective anti-money laundering controls, timely regulatory reporting and robust risk-management frameworks for financial institutions operating under South Africa’s financial-crime regulations.