Banks up scrutiny on firms after CBK fines
SEE ALSO :NYS Staff in Court over murderIn upholding the fines, Central Bank of Kenya said the lenders had not done enough to stop the looting, citing lapses in their systems. “CBK has reviewed each bank’s response to the penalty assessment and has concluded that the submissions were not sufficient to alter the findings of the investigations and the penalties assessed. Consequently, CBK has levied the penalties as assessed,” said Governor Patrick Njoroge. In its defence, KCB said from 2015 to August last year, it had flagged and made 653 reports on suspicious transactions, among them the NYS transactions, but it has never received any feedback from the regulator. KCB Group Chief Executive Joshua Oigara said banks are not perfect and that money laundering is a global challenge which the bank is working to tackle. “One of our biggest risks right now is government transactions so we have made improvements on an action plan and we are working with the CBK to ensure the processes are followed,” he said at the time.
SEE ALSO :NYS overshoots its Sh1.39 billion budgetThe banks, which have a duty to report large transactions, CBK said, contravened their mandate by not reporting transactions that exceeded Sh1 million to the Financial Reporting Centre. The investigations started in May last year after concerns were raised over the second round of plunder at NYS, which was estimated at Sh9 billion. CBK has also come under criticism on its policing of the sector, with some alleging that some of its officers were directly linked to the troubles of collapsed Imperial Bank. Imperial Bank staff for years allegedly gave CBK officials loans and even school fees in exchange for helping hide unauthorised debt, according to documents filed in court by various parties seeking to recover their money. Reports by news site Bloomberg also pointed to collusion between staff at CBK and Imperial Bank.
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