CBK governor Patrick Njoroge warns banks against graft activities

Central Bank of Kenya Governor, Patrick Njoroge. [Photo: Courtesy]

CBK governor Patrick Njoroge has warned banks against aiding in graft activities saying that this will draw unbendable sanctions.

Dr Njoroge said that any commercial bank that will take part in carrying out graft activities such as the case with opening accounts to deposit money acquired illegally will risk to lose their permits.

While addressing bankers organized by Kenya Bankers Association (KBA) in Nairobi, Dr Njoroge reaffirmed that Central Bank of Kenya was ready to penalize scoundrel banks involved in graft.

 He said, “Two weeks ago we informed the Kenyan people of the action we took against some your institutions because of non-compliance with integrity laws. Make no mistake, it was not easy, we considered all the possible negative outcomes from those actions, but we will not hesitate to do it again in under similar circumstances. Banks must steer away from being used conduits for of ill-gotten funds,”

Speaking at the 7^th Annual Research Conference by KBA, Dr Njoroge asserted that banks were meant to be custodians of the public and not partners of corruption in public organizations.

He said local bank heads owe a duty of care to the public not to back up or aid graft in public institutions. “The Kenyan people including “Wanjiku” demand that, from all of us, and will take us very unkindly if we look the other way,” Dr Njoroge reaffirmed.

In September, Central Bank of Kenya penalized five commercial banks KCB, Equity, Diamond Trust Bank, Co-operative and Standard Chartered who were alleged to have had a connection with theft of National Youth Service (NYS) funds a sum of Sh393 million.

The Director of Public Prosecution Noordin Haji was on record that any chief executive officers and employees of the implicated banks who might be associated with corrupt dealings will be detained and judged with a Sh1 million fine and up to three years’ imprisonment. Banks implicated will be fined up to Sh20 million and might as well lose their licenses.