Five Kenyan banks fined under AML laws

Five commercial banks were imposed a fine of $3.75 million in Kenya for failing to report suspicious transactions under anti-money laundering regulations, according to the Chief Prosecutor, Noordin Haji. KCB Group and Equity, which are among the biggest banks in the country, were fined. Others such as Co-op Bank Kenya, StanChart Kenya and Diamond Trust were imposed with penalties.

Kenya fines 5 banks $3.75m under anti-money laundering laws
Kenya’s chief prosecutor has fined five banks a total of 385 million shillings ($3.75 million) for not reporting suspicious transactions under anti-money…https://t.co/9lwRbtUtCi

— Omoh Gabriel (@gabomoh) March 5, 2020

Nearly a hundred million dollars were stolen from the National Youth Service (NYS). Many government officials and businessmen were charged with numerous crimes. This was a second time the banks had encountered fines. In 2018, the five banks were fined $4 million for not reporting suspicious transactions. Further investigations found that the lenders had failed to place appropriate systems to fight money laundering and were unsuccessful in knowing their customers as the law required.

The Chief Prosecutor was trying to defer the prosecution to notice if they improve their services within a specific time. The Chief Executives of the five banks stated that although the banks had failed to report suspicious transactions, they were not part of the corruption crime itself. In a statement, Standard Chartered Kenya announced that it had agreed to a settlement of 100 million shillings with the chief prosecutor, who had agreed to defer prosecution against the bank.

Patrick Mumu, an analyst at Genghis Capital, believes that the fines will not have a significant impact on the bank’s conduct. According to him, “The bigger impact will be at the operational level and how stringent banks will be on the movement of money and depositors, but not on their lending activities,”