Central Bank of Kenya’s (CBK) integrity is once again in the spotlight following fresh revelations that it may have shared one bank’s confidential information with a rival.
Email evidence seen by The Standard shows that a top Central Bank official shared confidential information belonging to Equity Bank with a top official of the collapsed Imperial Bank.
The information is a confidential brief to CBK on Equity Bank’s expansion plans into Rwanda and Tanzanian.
Equity Bank had requested CBK for a letter of no objection to their expansion plans for the respective markets. They also attached their business plans for the two markets for review by the regulator.
All this information ended up in the hands of Imperial Bank, thanks to the CBK official who forwarded it.
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The email is part of the evidence Imperial Bank directors are using to implicate CBK for the mess that led to its collapse through an intricate web of transfers and huge loans.
“We feel that with the Rwandan economy performing well and the access to financial services being extremely low, with about 50 per cent totally excluded from the financial sector, the time is right for Equity Bank’s entry,” read Equity’s letter dated December 15, 2010 and written by Chief Executive Dr James Mwangi.
“Currently, there are 12 banks operating in Rwanda, but none of these have a similar banking model to Equity Bank of serving the people at the bottom of the pyramid.”
Since Equity Bank was about to make a formal application to the National Bank of Rwanda, it requested CBK’s director of banking supervision to provide a letter of no objection.
It also attached its Rwandan business model for CBK’s “information and record.”
The previous month - November 16, 2010, Equity Bank had written a similar letter to CBK with respect to entering the Tanzanian market.
It was not immediately clear whether CBK eventually responded to the lender or issued it with no objection letters as requested.
However, five years later on April 1, last year, the “confidential Equity Bank docs” were forwarded from the email of a top CBK official to Imperial Bank’s chief operating officer.
It was sent out at 10:51:09am East African Time and received at 10:53:18am.
It was not clear from the email what the purpose for sharing Equity Bank’s documents with a rival bank was. Sharing of confidential business plans with rival businesses is in contravention of confidentiality rules of a regulator.
CBK has adversely been accused of conniving with wayward Imperial Bank leaders in sinking the bank.
A number of court cases relating to closure of the bank are pending in court.