CBK punishes five lenders for handling stolen NYS funds

Joseph Njoroge, the CBK Governor. [Photo: Courtesy]
Central Bank of Kenya has fined five banks for handling NYS scam funds.
Kenya Commercial Bank to pay Sh149.5 million,  Equity Bank to part with Sh89.5 million, Standard Chartered Bank fined Sh77.5 million, Diamond Trust Bank to pay Sh56 million and Co-Operative Bank of Kenya Sh20 million.

In a statement the Central Bank of Kenya said that the first phase of investigation of banks that were used in transacting fraudulent NYS funds is complete.

“The main objective of the investigation is to examine the operations of the NYS-related bank accounts and transactions, and in each instance assess the banks’ compliance with the requirements of Kenya Anti-Money Laundering laws and regulations,” read part of the statement.

The banks were found culpable for failing to report large cash transactions, failure to undertake adequate customer due diligence, lack of supporting documentation for large transactions and lapses in the reporting of suspicious transaction reports to the financial reporting centre.

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In May 2018, around 20 suspects were arraigned in Milimani Law Courts Nairobi over the theft of Sh460 million funds at the National Youth Service.

Among them was the then Principal Secretary of Youth Affairs and Gender Lilian Mbogo-Omollo and NYS boss Richard Ndubai.

In July, 27 the High Court in Nairobi released 27 suspects after they met the requirements for getting bail. Dominating the headlines amongst the suspects were the Ngiritas. These included mother Lucy Wambui, daughters Ann Wanjiku Wambere Ngirita and Phyllis Ngirita, Mr Jeremiah Gichini Ngirita and his wife Catherine Wanjiku Mwai.

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Central Bank of KenyaNYS scam fundsKenya Commercial BankEquity BankStandard Chartered BankDiamond Trust BankCo-Operative Bank of KenyaKenya Anti-Money Laundering