The Central Bank of Kenya (CBK) has slapped hefty fines on five top banks that are alleged to have been involved in the transactions of the second phase of the National Youth Service scandal.
Investigations by CBK revealed that the five banks were used by persons suspected of transacting illegally acquired NYS funds using the financial institutions.
The five banks, which were fined a total of Ksh.394 million include; Kenya Commercial Bank, Equity Bank, Standard Chartered Bank, Diamond Trust and Cooperative Bank of Kenya.
Of the total amount, KCB will pay the highest monetary penalty of Ksh.149.5 million followed by Equity Bank which has been hit with a fine of Ksh.89.5 million and Standard Chartered Bank Kenya Ltd, whose penalty is Ksh.77.5 million.
Diamond Trust Bank and Co-operative Bank of Kenya have been fined Ksh.56 million and Ksh.20 million respectively.
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A statement issued by the Central Bank on Wednesday indicates that over Ksh.3.6 billion was wired through the five banks with the largest flow of Ksh.1.6 billion having been channeled through Standard Chartered Bank.
Equity bank and KCB are reported to have handled Ksh.886 million and Ksh.639 million respectively while Diamond Trust Bank is said to have facilitated Ksh.162 million from the NYS loot.
Some of the violations include failure to report large cash transactions, failure to undertake adequate customer due diligence, lack of supporting documentation for large transactions, and lapses in the reporting of Suspicious Transaction Reports (STRs) to the Financial Reporting Centre (FRC).