The South African Bank Risk Information Center (Sabric) confirmed on Wednesday that at least 1,227 ATMs and 310 bank branches were vandalized or destroyed in the riots that ravaged KwaZulu-Natal and parts of Gauteng in July, which alarmingly also saw R119, 4 million in physical money stolen.
Sabric says this amount does not include the cost of damage to banking infrastructure, such as branches and ATMs.
He has also raised red flags that not all banknotes would have been stained with dye when they were stolen and warned that these ill-gotten gains could finance organized crime.
“The theft of R119 400 243 in cash is very concerning,” says Sabric CEO Nischal Mewalall.
“Not all banknotes are dyed and millions of unsoiled banknotes will be injected back into the economy. This money is the product of crime and now there is a war chest available to finance more organized crime, corrupt more officials and promote anarchy ”, he adds.
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Mewalall also expressed concern about “the impact of intelligence failures and the state’s response to the eight consecutive days of civil unrest that resulted in the unprecedented destruction of banking infrastructure in South Africa.”
According to Sabric, of the 1,227 ATMs reached, 256 ATMs were breached or broken into and 82 safes were also breached in the branches.
Around 36 ATMs physically stolen from sites have not been recovered to date.
The organization says that the effectiveness of South Africa’s anti-money laundering and terrorist financing regime will be critical in detecting the people behind these crimes.
“Therefore, Sabric urges companies to be strict about reporting on the cash threshold, not to participate in facilitating suspicious transactions, and to immediately report any suspicious and unusual transactions to the Financial Intelligence Center.” he adds.
Meanwhile, the South African Banking Association (Basa) earlier this month reported that more than 1,400 ATMs had been affected by the riots.
“An indicative average replacement cost for an ATM in South Africa is R385,000, with additional installation costs,” notes Basa.
“These costs can vary greatly for any individual ATM and not all vandalized ATMs will have to be replaced,” notes the association.
“Banks will probably have to rebuild almost 200 branches… The indicative average cost to rebuild a branch is estimated at R4.3 million. There will also be additional operating costs to bring a branch back to full service, ”he adds.
Full recovery of the physical banking infrastructure is expected to take some time and banks have encouraged their clients to use digital banking platforms to access their products and services.
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