Blame game on as banks weigh in

Central Bank of Kenya (CBK) Governor Patrick Njoroge addressing the press at his office on March 20, 2018. [Beverlyne Musili/Standard]

Banks claim they are not authorised to block withdrawals of huge sums of money.

Bankers who spoke to The Standard on condition of anonymity said their role ends at passing information on suspicious transactions to the Financial Reporting Centre (FRC).

FRC was recently formed to act on suspicious transactions, whether in deposits or withdrawals.

Tough questions have emerged on the role played by commercial banks as enablers of money laundering in the Sh9 billion National Youth Service scandal.

Investigators are yet to establish the real beneficiaries of the scam, but have already frozen specific bank accounts of key suspects without disclosing the value of funds withheld.

On one hand, the public is seeking answers to why the financial institutions helped suspects withdraw tens of millions of Shillings while smaller transactions by the ordinary customers are highly scrutinised.

Withdrawal requests

It is not clear what actions FRC took, if at all, since most of the transactions that have only come to light now actually took place as far back as 2016.

Bankers said they were not in a position to refuse withdrawal requests.

“I am only required to indicate in my report information that I have extracted from the customer on purposes of the significant cash withdrawal exceeding Sh1 million,” a bank manager told The Standard.

Typically, customers are allowed to draw less than a million from their bank accounts.

Central Bank of Kenya guidelines require that transactions involving amounts starting from Sh1 million and above be wired to the eventual beneficiary.

Allowing for cash withdrawal in huge amounts ensures the trace is lost at the person operating the bank account, while the real recipient remains in the shadows – as is suspected with the current case.