Five Banks Penalized By CBK Over Flawed NYS Transactions

The Central Bank of Kenya (CBK) has penalize five banks  that failed to comply with the requirements of Kenya’s Anti-Money Laundering/Combating Financing Terrorism laws and regulations in NYS transactions that amounted to Sh.3.5 billion.

The five banks that include Standard Chartered, Equity Bank, KCB, Co-operative Bank, and Diamond Trust Bank Kenya Ltd will have to pay a total of Sh392 million in penalties to the CBK.

According to the CBK the violations that the banks committed included failure to report large cash transactions, failure to undertake adequate customer due diligence, and lack of supporting documentation for large transactions.

The CBK said that the findings and penalties was the first phase and that the second face would include sharing the findings with investigative bodies in order toestablish criminal culpability.

“CBK has shared the findings with the relevant investigative agencies for their appropriate action. Further, an additional set of banks will also be identified and investigated, The actions taken by CBK, and subsequently by other agencies, are aimed at safeguarding stakeholders’ interests and maintaining a healthy financial sector. CBK will continue to ensure that the banking sector’s legal and regulatory framework, including for AML/CFT, is aligned to best practices,” the statement read in part.

The central Bank said that they had a discussion with the board of governors from each of the banks  who said that they were committed to comply with the aspects of the law.

This is the breakdown for the penalties;

Standard Chartered Bank transacted Sh1.628 billion on its account, it was penalised Sh77.5 million. Equity Bank is said to have transacted Sh886 million and will pay Sh89.5 million in fines. KCB transacted Sh639 million and will pay Sh149.5 million in penalties. Co-operative Bank transacted Sh263 million and will pay Sh20.0 million while Diamond Trust Bank transacted Sh162 million and will pay Sh56.0 million.

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