CBK has taken regulatory action against Absa Bank Kenya for failing to provide information about some foreign exchange transactions in March
The Central Bank of Kenya (CBK) has taken regulatory action against Absa Bank Kenya for failing to provide information about some foreign exchange transactions conducted in March 2020.
According to a statement released by CBK, the lender did not have a satisfactory assurance of the source of funds used in the forex transactions.
“In investigating these and other earlier transactions it is evident that Absa Kenya did not have a satisfactory assurance of the underlying commercial transactions supporting these trades, as is required, nor did the bank ensure the standard checks on anti-money laundering and combating the financing of terrorism (AML/CFT) and know-your-customer (KYC) requirements were applied,” the statement reads.
Kenyan banks are required by law to have safeguards against money-laundering and other illicit financial transactions. Any suspicious transactions involving large sums of money must be reported to the Central Bank.
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The Central Bank has temporarily stopped Absa Bank from acting as an authorized foreign exchange dealer from Thursday, April 9 to Wednesday, April 15, 2020. However, all committed transactions as at April 8, 2020, can be settled.
Additionally, the regulator has asked Absa Bank to put in measures that will ensure all necessary documents are provided during foreign exchange transactions and that Anti-money laundering and combating the financing of terrorism rules are adhered to.
The bank faces challenges barely two months after it officially changed its name to Absa Bank Kenya PLC
; a year and a half after Absa Group bought a controlling stake at the bank’s parent company Barclays Africa, prompting the name change.