Bank robberies, ATM & commercial crime, vehicle theft

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22 September 1999
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Meeting Summary

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Meeting report

22 September 1999

The Banking Council of South Africa gave a briefing on Bank Robberies; ATM Crime; Commercial Crime; Vehicle Crime and strategies for dealing with these.

Representatives of the Banking Council included Mr Tucker (CEO),Mr Mali (GM) and Mr Myburg (GM). Their briefing included the following points:

The Nature of Banking
- Industry, commerce and finance go hand in glove
- Banks collect the savings, handle the transactions and make the loans
- Every economically active person or company is a client of a bank
- Banks rely totally on trust. If All South Africans attempted to withdraw their savings from the banks, the banks would only be able to repay 20% of those savings because they have been lent out.

The Banking Industry
- 4 major banks (Standard, First Rand, Nedbank and ABSA)
- 24 other SA banks
- 81 foreign banks and Rep offices
- 4 038 Branches and Agencies
- 7 383 ATMs
- 3 Major Cash in Transit Companies: SBV / FG / COIN

Banking Transactions
- 1.1 million cheques per day (475 lost & 8,800 Returned to Drawer)
- 2 million ATM transactions per day (one of the highest rates of usage in the world)
- 1.2 million EFT transactions per day (electronic transactions)

The "state of the industry"
- Withstood the Asian banking crisis.
- IMF comment:-
"The SA banking system was found to be generally sound - in sharp contrast to some in East Asia, whose flaws played a major role in triggering the present crisis. SA banks are well-capitalised, well-run and organised and, in general, have sophisticated systems and corporate governance systems in place."

By world standards they are efficient:
- SA = 57 - 65 % Cost ratio
- USA, Canada & Australia = 62 - 64 % Cost ratio
- United Kingdom = 55.5 % Cost ratio

SA Bank interest margins are low by international standards:
- SA = 3.7% interest margin
- Argentina = 5.0%, Columbia = 10.0% (comparable developing countries)
- Kenya = 6.9%, Zimbabwe = 7.7%, Botswana 8.8% (African countries)
- USA = 4.5%, UK = 2.5% (Developed countries)

On the face of it they are very big and profitable
- But despite their size - R654 billion
- R600 billion belongs to their clients
- And despite their profits - R6.9 billion
- That does not take into account the R5.2 billion imputed interest on their capital

In fact the return on capital is low by world standards - returns on equity around the world:
- South Africa = 20% (nominal ROF), 15% (risk-free return), 5% (risk return)
- Kenya = 16% (nominal ROF), 9% (risk-free return), 27% (risk return)
- Zimbabwe = 17% (nominal ROF), 42% (risk-free return), 5% (risk return)
- Botswana = 39% (nominal ROF), 13% (risk-free return), 26% (risk return)
- USA = 15% (nominal ROF), 5% (risk-free return), 10% (risk return)
- UK = 20% (nominal ROF), 5% (risk-free return), 15% (risk return)

Implications for Safety and Security
- It is a strategic industry on which we all depend
- It is not sufficiently profitable
- Some of the biggest costs are - robberies, fraud and demoralisation of staff and the public

Principles of Crime Strategy
- Banks are not responsible for the maintenance of law and order
- It will be an evil day that banks establish private armies to deal with the crime
- The banks will work closely with the Government to get crime under control, and do everything they reasonably can to assist

Specific Crime Strategies
1. Robberies
2. ATM Crime
3. Commercial Crime
4. Vehicle Crime

1. Robberies
Robbery Statistics
- Bank & Bank CIT Incidents: 465 (1997); 382 (1998)
- Cash Stolen: R136 mill (1997); R112 mill (1998)
- Cash Recovered: R1.4mill (1997); R4.7 mill (1998)
- Cost of Protection (Double doors, CCTV, Guards, etc.): R800 mill (1997); R1 billion (1998)
- Total Cost: R935 mill (1997); R1.1 billion (1998)

Robbery Strategy
Met with Minister & Commissioner in May 1997 and the following were agreed to:
- Integrated Structures
- Bank Crime Database
- Co-operative Initiatives by banks

Integrated structures
Joint efforts by SAPS, Justice and the Banking Sector to limit and investigate bank robberies, e.g.:
- Crime Intelligence Support
- Crime Scene Management
- Suspects with Warrants - arrest them
- Suspects without Warrants - arrest them for other crimes
- ID Parade Rooms Assistance

Banking Council Crime Database
- Installed and Operational: Bank Robberies & Burglaries; CIT Heists; ATM Crime (the only existing national database on ATM crimes)
- Accepted by SAPS as Reliable - feeds SAPS Strategic, Tactical and Operational Desks

Co-operative Initiatives by Banks
- Design of new shopping centres to facilitate cash collection/delivery (90% of CIT heists)
- Central operations room
- Common standards and procedures

All of these have been implemented
- 22% Drop in heists (although some crime has been displaced to other CIT and retail operations)
- The police have done everything that was agreed and more

2. ATM Crime
The nature and volume of ATM Crime
- +1100 incidents per week being reported (ATM vandalism, jamming, card swopping)
- Predominantly syndicates
- Difficulties in securing investigative resources, prosecutions and convictions

ATM Crime Combating Initiatives
- 1 national & 9 provincial co-ordination committees, including SAPS and Justice
- Shared security at selected ATM sites
- Consumer awareness and education
- Minimum physical standards (e.g. lighting, access, location)

Results of these initiatives
- Too early to say but we are confident
- Danger of effective countermeasures resulting in escalation in violence

3. Commercial Crime
National Commercial Crime Statistics
- In 1998 SAPS opened 59515 dockets, involving a potential loss of R4.6b
- Fraud: 84,1%
- Forgery: 7,1%
- Theft : 2,9%
- Other Categories: 5,6%

Banking Sector susceptibility to Commercial Crime
- +40 % of commercial crime is perpetrated against banks
- A single scam can involve R50-100m
- In 1998 banks lost R151m on cheque fraud alone

Commercial Crime Initiatives
- Special Commercial Courts pilot project - R5m commitment over 3 years
- The AFSA Trust initiative to deal with high profile complex fraud cases (includes training of state prosecutors)
- Inter-bank Fraud Liaison Committee co-operating with SAPS

Results and the way forward
- Too early to say, but we do not think that we have a strategy which is going to make a material difference
- National anti-corruption drive is crucial
- Continued co-operation with the departments of Justice, Safety and Security and of Correctional Services
- Close co-operation at Portfolio Committee level

4. Vehicle Crime
Vehicle Crime Combating Initiatives
- Co-operation between stakeholders to establish a National Intelligence System to combat vehicle crime
- Build up a credible statistical data base
- BAC initiatives concerning border controls, "chop shops", part numbering, vehicle registrations

General Initiatives
Reward Schemes to Combat Bank Related Robberies
- R50 000 for information leading to the arrest and conviction of robbers
- R10 000 for information leading to the arrest and conviction of ATM criminals
- Special Reward Scheme for high profile robbers

But …..
- SAPS do not have the capacity to allocate dedicated resources
- Combating of bank and CIT robberies is not approached on a holistic basis
- The focus is on only two components of crime, namely the offence and the offender

- To develop and implement an integrated strategy to enhance The Banking Council's existing crime combating strategies.

- Excellent co-operation between SAPS, NDPP and Banking Council
- Building National and International Anti-Crime Partnerships
- We are not winning all the battles, and a great deal more needs to be done particularly in the area of fraud and ATM crime
- The successes of Safety and Security need to be carried through into prosecution, conviction and incarceration

Questions by committee members
Mr George(ANC) enquired as to what extent robberies are inside jobs.

Mr Tucker responded that this is difficult to ascertain although there are confirmed cases of CIT (cash in transit) employees informing criminals of the routes to be taken by the vans.

Mr Booi (ANC) asked about the involvement of international crime syndicates and money laundering in South Africa.

Mr Myburg admitted that South Africa is subject to infiltration by international syndicates. He said that the Banking Council co-operated with other SADC countries as well as Interpol in order to deal with this. Mr Tucker added that unfortunately South Africa lags behind the rest of the world with regard to provisions for dealing with money laundering. He maintained that South Africa needed a police response unit with the ability to respond quickly. The Banking Council is involved with drafting legislation to address these problems.

Mr Zondo (ANC) raised the issue of micro lenders as well as inquiring if the ringleaders of various operations were being apprehended or was it only the foot soldiers that were being caught.

Mr Tucker agreed that the micro lenders were indeed problematic and that he is currently consulting with the Minister of Finance in an attempt to solve the problem. Responding to the second question, he said that although in the past only subordinates have been apprehended, the integrated database has aided in the arrest of some ringleaders.

Mr Ndlovu (IFP) asked about the extent of police involvement in crime of the nature discussed in the meeting.

Mr Tucker said that there are corrupt elements everywhere, but the SAPS had generally been very helpful in terms of crime prevention measures. Fifteen per cent of crimes are now foiled before they occur.

An ANC member raised the issue of community involvement in the apprehending of criminals and in the development of an environment that did not support crime.

Mr Tucker underscored the fact that every person needs to play their part in crime prevention.

The meeting was adjourned.


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