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Three banks fined Sh1m each over NYS scam

NEWS
By Roselyne Obala | August 5th 2016
Central Bank of Kenya Governor Patrick Njoroge.

Three banks have been fined Sh1 million each by the Central Bank of Kenya (CBK) for handling the controversial Sh761 million National Youth Service (NYS) payments.

Family Bank, Faulu Micro Finance Ltd and Sidian Bank, formerly K-Rep, were penalised for handling proceeds of crime.

According to Governor Patrick Njoroge, this is maximum fine for banks that decline to report suspicious transactions.

"We conducted targeted inspection of Family Bank and in the process discovered that two other banks were involved in the money trail and were also inspected and found to be culpable of breaking the CBK prudential guidelines," said the governor.

Dr Njoroge, who appeared before the National Assembly Public Accounts Committee chaired by Rarieda MP Nicholas Gumbo, also revealed that nine senior directors of Family Bank that were to be re-vetted by Central Bank had "exited" while some senior managers at Faulu Microfinance and Sidian were in the process of undergoing re-vetting for engaging in financial misconduct.

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