Ten commercial banks under investigation on NYS cash

A machine counting money at the Bank's teller point. []

Ten commercial banks linked to processing clients’ transactions from the National Youth Service are in the red as they risk losing their operating license.

However, even with the magnitude of consequences that could follow, the banks have maintained silence on the matter only saying they did nothing wrong.

The Directorate of Criminal Investigation (DCI) and the Central Bank of Kenya (CBK) have spoken tough on punitive measures they could take on banks found culpable.

Besides DCI and CBK, the banks are under investigation by the Office of Director of Public Prosecution (ODPP), National Intelligence Service (NIS) and the Kenya Revenue Authority (KRA). They still maintain they have no comment on the matter that is now under investigation.

Stanbic Bank said according to Daily Nation said that its officials are “bound by the requirements of Preservation of Secrecy and as such any information (on what they did when the money was wired) can only be shared with approved authorities.”

Kenya Commercial Bank held studious silence on the matter only saying that “As you are aware KCB, this issue is under inquiry by legally mandated investigating authorities and is a subject matter of a court case. We, therefore, do not wish to comment.”

Standard Chartered Kenya through its CEO Lamin Manjang remained mum saying that “We are unable to comment on the matter since it is under investigation by the authorized government agencies.”

Barclays Bank of Kenya said it is not ready to comment because this could jeopardize the quality of ongoing investigations by the state.

“We are aware of the ongoing investigation at the NYS. The matter is being investigated by the relevant government authorities … beyond that, we cannot comment on the matter as it is still a subject of investigation,” said the bank as further quoted by Daily Nation.

Others banks under investigation are Diamond Trust Bank, Equity Bank Co-operative Bank, and Consolidated Bank.

The banks are required by law to comply with Know Your Customer rules which basically require the customer to explain where the money has come from and its intended purpose. In case of anything suspicious, the bank is duty bound by law to report to the Financial Reporting Centre (FRC).

However, DCI boss George Kinoti said the banks should not hide behind the investigations.

“They should come out clean on whether prudence guidelines were flouted,” stated Kinoti. “But tell them, they have touched a wrong number. We and CBK are going for them.”

CBK Governor Dr. Patrick Njoroge on Tuesday castigated banks under investigation terming them complicit in the NYS theft where fake vouchers were cashed-in and money paid out.