How Stanbic Bank lost Sh5.8 million in a single transaction

Two events in Nairobi and Mombasa counties at CFC Stanbic bank cost two of their workers’ jobs after the bank lost some Sh5.8 million in a transaction.

On May 7, 2014, Nelly Wanjiru, a customer, went to deposit Sh650,000 at the bank’s Westlands branch, and while in the process, she began convulsing and fainted.

The teller made a mistake in the transaction and added an extra zero, making the deposit Sh6.5 million.

The teller, after noting the error, notified her superiors at around noon. The owner of the account, Stephen Chorio, who it was revealed in court was an executive banking client, withdrew some Sh1 million on that day at the Mombasa branch.

A day later, Chorio sought to convert the balance in his account to dollars and sought the help of Faith Thiong’o, a sales agent, who negotiated with CFC for a good offer to convert the money. The money was converted to $70,000 and he deposited Sh95,000 into an account that he opened on that day.

Then team leader, Antony Kinyua, approved the transaction, and this would later come to bite him and teller Jenipher Mwende.

A police investigation was opened, and the two were cleared and during this process, they were summoned separately to disciplinary hearings, then they were sacked.

Kinyua appealed the decision to the bank’s CEO, who later informed that the decision by the disciplinary committee was final and he was fired.

They filed different claims in court contesting the reasons for their dismissal and the process. Mwende won her case and she was awarded Sh870,738 by Justice Linnet Ndolo in October 2021.

In December last year, Kinyua won his case and was awarded Sh300,000 by Justice Christine Baari who found that he was unfairly sacked.

Kinyua’s fault was to approve the transaction since he was the team leader that day, the branch manager was not around and the assistant was launching ATM cards. This was one of the reasons the bank said they let him go because they said he should not have authorised the transaction.

It added that Kinyua had a duty to ascertain the transaction’s authenticity and review the history of the customer’s account.

In his defence, he said he did the necessary checks after the transaction was referred to him by the banking system.

On whether he was not allowed to approve a transaction above Sh1 million, Kinyua testified that if that was the case, then the banking system would have flagged him and the system that the bank alleges he disregarded was not in place at the time.

A witness who testified on behalf of the bank said Kinyua was only supposed to authorise the transaction and not approve it, and he should have sought the approval of the manager, who was away at the time.