The Central Bank of Kenya (CBK) has suspended Ecobank Kenya from Forex trading for a week over a violation of set regulations.
In a statement to newsrooms on Monday, CBK Governor Patrick Njoroge said the bank engaged in unsafe trading practices and breached the Prudential Guidelines on Foreign Exchange Exposure Limits in March 2022.
In its investigations, CBK established that Ecobank did not have sufficiently robust risk controls to prevent breaches on its foreign exchange exposure limits, or the inaccurate reporting of its position.
Consequently, the regulator ordered the lender to cease transacting as an authorised foreign exchange dealer in the Kenyan market from Tuesday, March 29, 2022, to Monday, April 4, 2022.
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“During this time Ecobank cannot transact, inter alia, in the interbank foreign exchange market. However, all committed transactions as at March 28, 2022, can be settled,” said CBK.
Further, the bank is required to put in place a remedial plan to ensure the operational lapses that led to the non-compliance are addressed by Thursday, March 31.
“The remedial plan should also point to specific measures to address the unsafe trading practices that led to the non-compliance and to enforce adherence to orderly conduct as stipulated in CBK’s Guidelines on Foreign Exchange,” added CBK.
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The bank is also required to reverse the amount of additional exposure that was created as a result of the regulatory breach.
“Ecobank’s acknowledgement of its obligations as an authorised foreign exchange dealer and its commitment to address the underlying issues is noted,” the regulator noted.
Press release: Regulatory Action Against Ecobank Kenya Limited pic.twitter.com/IpSQeh6ODj
— Central Bank of Kenya (@CBKKenya) March 28, 2022
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