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Saturday 22 January 2022
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Five banks lose bid to block Sh392m CBK fine over NYS scandal

The five banks penalised over suspicious transactions relating to the National Youth Service scandal have lost a bid to block the fines.

The Central Bank of Kenya (CBK) on Friday said the banks presented insufficient responses on why they should not be penalised.

“CBK has reviewed each bank’s response to the penalty assessment and has concluded that the submissions were not sufficient to alter the findings of the investigations and the penalties assessed. Consequently, CBK has levied the penalties as assessed,” CBK said in a statement to the media.

Read: CBK penalises five banks Sh392m over flawed NYS payments

The banks are Standard Chartered, Equity Bank, KCB, Co-operative Bank, and Diamond Trust Bank.

CBK Investigations revealed that they handled the largest flows and violated anti-money laundering regulations in the NYS transactions amounting to Sh3.5 billion.

“CBK assessed monetary penalties for each of the five banks in accordance with the extent of the violations that were identified and pursuant to CBK’s powers under the Banking Act and the Central Bank of Kenya Act,” read part of the statement.

On September 12, the regulatory body said the banks failed to comply with the requirements of Kenya’s Anti-Money Laundering/Combating Financing Terrorism laws and regulations.

It said the banks will be penalised Sh392.5 million against a transaction value of Sh3.578 billion.

While 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.

All the five banks were to pay Sh392.5 million fine imposed in mid September.




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