In a renewed battle against corruption,
the Central Bank of Kenya (CBK) has issued a stern warning that it would
sanction any banks handling proceeds of graft.
the Central Bank of Kenya (CBK) has issued a stern warning that it would
sanction any banks handling proceeds of graft.
The Central Bank of Kenya (CBK) Governor Patrick Njoroge said on Thursday that the banks will face stiff sanctions.
He was addressing bankers at the 7th Annual Research Conference organised by the Kenya Bankers Association (KBA) in Nairobi.
Dr Njoroge said CBK is ready to crack the
whip again on any rogue bank which helps ship out money from public
institutions illegally obtained from graft.
whip again on any rogue bank which helps ship out money from public
institutions illegally obtained from graft.
“Two weeks ago we took action against
some of your institutions because of non-compliance with integrity laws.
Make no mistake,” warned Dr Njoroge.
some of your institutions because of non-compliance with integrity laws.
Make no mistake,” warned Dr Njoroge.
“We will not hesitate to do it again
under similar circumstances. Banks must steer away from being used as
conduits for ill-gotten funds,” he added.
under similar circumstances. Banks must steer away from being used as
conduits for ill-gotten funds,” he added.
He said bank chiefs owe a duty of care to the public not to abet or aid graft in public institutions.
“The Kenyan people demand that, from all of us, and will take us very unkindly if we look the other way,” Dr Njoroge said.
Nearly a fortnight ago, the CBK fined five banks $3.1 million for their role in aiding the movement of the stolen funds.
The penalised banks were KCB Group, the
region’s largest bank by assets which was slapped with a $1.49 million
fine, Equity Bank $895,000, Standard Chartered Bank-Kenya $775,000,
Diamond Trust Bank $560,000 and Co-operative Bank
of Kenya $200,000.
region’s largest bank by assets which was slapped with a $1.49 million
fine, Equity Bank $895,000, Standard Chartered Bank-Kenya $775,000,
Diamond Trust Bank $560,000 and Co-operative Bank
of Kenya $200,000.
The office of the Director of Public
Prosecutions said it was also preparing charges against bank executives
for their alleged role in helping ship out more than $30 million of
money stolen from Kenya’s National Youth Service
(NYS) two years ago.
Prosecutions said it was also preparing charges against bank executives
for their alleged role in helping ship out more than $30 million of
money stolen from Kenya’s National Youth Service
(NYS) two years ago.
The law requires all financial
institutions to file daily reports with the Financial Reporting Centre
on transactions above $10,000 and those deemed suspect. CBK accused the
five banks of failing to comply with the requirements
of Kenya’s Anti-Money Laundering/Combating Financing of Terrorism laws
and regulations.
institutions to file daily reports with the Financial Reporting Centre
on transactions above $10,000 and those deemed suspect. CBK accused the
five banks of failing to comply with the requirements
of Kenya’s Anti-Money Laundering/Combating Financing of Terrorism laws
and regulations.
An individual found guilty of
contravening the Crime and Anti-Money Laundering Act faces a prison term
not exceeding 14 years or a fine of Ksh5 million ($50,000).
contravening the Crime and Anti-Money Laundering Act faces a prison term
not exceeding 14 years or a fine of Ksh5 million ($50,000).
