Money laundering: Banks told to enlist sleuths

The Government has ordered all lenders to hire experts to audit their internal systems for compliance in the fight against money laundering.

The Central Bank of Kenya (CBK) in a circular to bank chiefs has directed them to hire an independent external expert to review customer due diligence processes, evaluate money laundering and terrorism financing risk assessment as well as the adequacy of internal controls.

The contracted expert will also review how the banks monitor transactions and reports on suspicious or larger transactions.

“CBK issues the following directives to all banks… nominate independent and competent external third party to undertake a review of the institutions anti-money laundering and financing of terrorism compliance programme,” said CBK Director Banking Supervision Gerlad Nyaoma the circular dated March 18, this year.

CBK expects the lenders to submit a review of their compliance by the end of this month which will include a review of record keeping procedures and an overhaul of the role of the money laundering reporting officers.

Last year, the CBK fined the five banks – KCB, Equity, Stanchart, Cooperative and DTB – Sh392.5 million for facilitating the National Youth Service scandal.