NYS tenders scam gets CBK fining five major banks in Kenya

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NYS tenders scam gets Central Bank of Kenya issuing fines to five major banks in Kenya.

This follows months of investigations into the manner of which the banks enabled movement of funds leading to the loss of Sh9 billion at National Youth Service (NYS).

The five banks that got fined as a result of the NYS tender scam include KCB, Equity Bank, Standard Chartered Bank, Diamond Trust Bank Kenya and Co-operative Bank. They all handled National Youth Service funds that were used to pay for the tender scams.

“CBK announces the conclusion of the first phase of the investigation of the banks that were used by these persons in transacting the NYS funds. The investigations prioritised banks that handled the largest flows, namely; Standard Chartered Bank Kenya Ltd, Equity Bank Kenya Ltd, KCB Bank Kenya Ltd, Co-operative Bank of Kenya Ltd, and Diamond Trust Bank Kenya Ltd,” CBK said in a statement.

KCB received the highest fine at Sh149.5 million, Equity Bank (Sh89.5 million), Standard Chartered Bank (Sh77.5 million), DTB (Sh56 million) and Cooperative Bank (Sh20 million).

NYS tenders scam funds fined banks in Kenya

BANKAMOUNT RECEIVED FROM NYS (Amount in Millions Ksh)CBK Fine (Amount in Millions Ksh)
Standard Chartered Bank Kenya Ltd.1,62878
Equity Bank Kenya Ltd.88690
KCB Bank Kenya Ltd.639150
Co-operative Bank Kenya Ltd.26320
Diamond Trust Bank Kenya Ltd.16256
The table shows the five banks connected to handling the NYS tenders scam funds, including the fine amounts that were enforced to them by Central Bank of Kenya.

 

The five banks connected to handling the NYS tenders scam funds, were found to be in abuse of the law for failing to report large cash transactions and failing to carry out satisfactory customer due diligence. The banks also lacked supporting documentation for large transactions according to Central Bank of Kenya.

CBK said the second stage of the NYS tenders scam funds investigation will involve determining the criminal responsibility of the organizations and persons involved.

Apparently the payments amounting to millions of shillings, would be paid off from the Integrated Financial Management Information System (IFMIS) to the involved companies’ accounts. The persons involved would complete the application through IFMIS to enable the request of funds, which was shockingly mostly fully paid off within an hour after the payment request was made.

Central Bank of Kenya has now shared the findings with the appropriate investigative agencies for their appropriate action. Expect more banks to be identified as the investigation into the NYS tenders scam funds continues.

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