Central Bank of Kenya (CBK) Governor Patrick Njoroge. FILE PHOTO | NMG
Summary
- Dr Njoroge, who addressed bankers at a banking forum organized by sector lobby Kenya Bankers Association (KBA) in Nairobi, said that the regulator is ready to crack the whip again on any rogue bank which helps ship out money from public institutions illegally obtained from graft.
- Mid this month the CBK fined five commercial banks a total of Sh392.5 million in connection with the theft of funds at the National Youth Service (NYS).
- Those penalised are KCB Group (Sh149.5 million), Equity Bank (Sh89.5 million), Standard Chartered Bank-Kenya (ShSh77.5 million), Diamond Trust Bank (Sh56 million) and Co-operative Bank of Kenya (Sh20 million).
Commercial banks found to be handling graft proceeds will face
stiff sanctions, Central Bank of Kenya (CBK) Governor Patrick Njoroge
warned on Thursday.
Dr Njoroge, who addressed bankers
at a banking forum organized by sector lobby Kenya Bankers Association
(KBA) in Nairobi, said that the regulator is ready to crack the whip
again on any rogue bank which helps ship out money from public
institutions illegally obtained from graft.
“Two weeks
ago we informed the Kenyan people of the action we took against some
your institutions because of non-compliance with integrity laws. Make no
mistake, it was not easy, we considered all the possible negative
outcomes from those actions,” said Dr Njoroge at the 7th Annual Research
Conference by the KBA.
“But we will not hesitate to do it again in under similar
circumstances. Banks must steer away from being used conduits for of
ill-gotten funds,” he added.
He said local bank heads owe a duty of care to the public not to abet or aid graft in public institutions.
“The
Kenyan people including “Wanjiku” (ordinary Kenyan) demand that, from
all of us, and will take us very unkindly if we look the other way,” Dr
Njoroge said.
Mid this month the CBK fined five
commercial banks a total of Sh392.5 million in connection with the theft
of funds at the National Youth Service (NYS).
Those penalised are KCB Group
(Sh149.5 million), Equity Bank (Sh89.5 million), Standard Chartered Bank-Kenya (ShSh77.5 million), Diamond Trust Bank (Sh56 million) and Co-operative Bank of Kenya
(Sh20 million).
A day later, the Director of Public Prosecutions (DPP) Noordin
Haji said that implicated chief executives and employees of the banks
who helped ship out billions of shillings from the NYS will be arrested
and prosecuted. The law requires all financial institutions including
banks, insurance companies and Saccos to file with the Financial
Reporting Centre (FRC) daily reports on transactions above Sh1 million
and those deemed suspect.
Bank executives and persons
who are convicted for handling illicit cash face a Sh1 million fine and a
three-year jail term, while institutions including banks, credit unions
facilitating such deals could be fined up to Sh20 million upon
conviction. Banks could also lose their licences.
The
two day KBA event, themed “Credit Market Dynamics in an Evolving
Regulatory and Market Participants’ Environment”, has brought together
banking experts and stakeholders to assess ways in which the financial
system can “promote efficient credit allocation to the economy.”
“This
forum brings together a rich mix of thought leaders from both the
public and private sectors to explore challenges in the financial sector
with a view to explore what works and what doesn’t,” said KBA CEO Habil
Olaka.
No comments :
Post a Comment