Crackdown on rogue banks will not spare former, current Central Bank of Kenya staff

Central Bank of Kenya Governor Patrick Njoroge

The Central Bank of Kenya (CBK) can now account for Sh8 billion worth of loans at Chase Bank.

CBK Governor Patrick Njoroge (pictured) said the money was plugged back into the bank in the three weeks it was closed. Dr Njoroge said that the current enforcement of banking regulations and guidelines will continue to rid the banking sector of fraud and corruption.

He further warned that past and present banking officials who failed to perform their duties diligently and were part of the failure to effectively supervise the banking sector will not be spared. “There is a danger of rushing to change legislation to address every problem we have... to the contrary, it is more of an issue of enforcement and compliance. It is the quality of our supervision that we need to strengthen,” said Njoroge.

He warned that the regulator would go after those involved in fraud that has cost millions of depositors and shareholders dearly and cited that former CBK officials who slept on the job would not be spared. “If former regulators or bank officials were involved in cover up, they will be held accountable.”

He took issue with Imperial Bank shareholders and management saying recovery of the money has become a challenge but was quick to point out that CBK would take necessary measures to recover lost money even if meant CBK staying in the corridors of justice for a long time.

“One of the things I have said is that this year we are going to be in court for a long time. It does not matter how long it takes to realise a better banking sector.”

Dr Njoroge, who was addressing a media breakfast at a Nairobi hotel, was explaining the regulator’s determination to see an end to the recent banking crisis. He said the current changes were not something Kenyans should worry about.