CBK Fines: Yesterday, the Central Bank of Kenya (CBK) announced that it was placing a Sh. 392.5 million fine on five local banks that were used by National Youth Service scam suspects to transact some Sh. 9 billion fraudulent.
Additionally, CBK ordered the five banks to submit an action plan explaining how they will prevent such lapses in future. “Each has expressed their strong commitment to being fully compliant on all aspects of the law, and addressing the identified lapses through time-bound action plans,” CBK Governor Patrick Njoroge said in a notice.
In response to the CBK Fines, however, Equity Bank, KCB, DTB and StanChart, claimed that they were yet to be penalised. Apparently, they had only received summons to explain how the transactions took place.
But something else caught our attention in this matter: the press statements that were separately sent out by Equity Bank and DTB.
Despite the seriousness of the subject matter, it seemed that the two banks had copied each other’s statements and, or collaborated in the sending of their statements, even though they are facing different fines and accusations. Equity Bank was fined Sh. 89.5 million while DTB was fined Sh.56 million.
The release from DTB is attributed to Nasim Devji, who is Group Chief Executive Officer and Managing Director at DTB Group.
Here is the response sent out by Equity Bank:
“Press Statement:
Equity Bank has received the report of the Central Bank of Kenya June 2018 inspection report targeted at the National Youth Service banking transactions for the period 2015 to 2018 at a meeting held with the Central Bank of Kenya on 10th September 2018.
Further, on 12th September 2018, the bank received a letter outlining the areas of
investigations and requesting the bank to respond within the next 14 days on why the
monetary penalty it has assessed should not be levied. We emphasise that at this point no penalty has been imposed by the Central Bank of Kenya.
The bank is currently reviewing the report with a view to providing a detailed response to the issues raised by the Central Bank of Kenya within the stipulated period.
We wish to reassure our stakeholders that Equity Bank is a regulated entity that respects and complies with all laws and applicable regulatory guidelines. We also wish to confirm that the Bank respects and adheres to the rules and regulations of all the countries in which we operate.
We remain committed to providing our customers and stakeholders with excellent service coupled with utmost respect while adhering to the banking laws and regulations as stipulated in each of the markets we operate in and global best banking practices.
We remain committed in our unwavering support to the government in its effort to
eradicate corruption and to uphold the integrity of the financial system in order to build a strong stable secure financial system.”
And here is the response from DTB Bank:
FOR IMMEDIATE RELEASE:
DTB BANK RESPONSE TO CENTRAL BANK OF KENYA’S STATEMENT ON NATIONAL YOUTH SERVICE TARGETED INSPECTION
September 12th, 2018 … DTB has received the report of the Central Bank of Kenya July 2018 inspection report targeted at the National Youth Service banking transactions for 2016 at a meeting held with the Central Bank of Kenya on 10th September 2018.
Further, on 12th September 2018, the bank received a letter outlining the areas of investigations and requesting the bank to respond within the next 14 days on why the monetary penalty it has assessed should not be levied.
We emphasise that at this point no penalty has been imposed by the Central Bank of Kenya.
The bank is currently reviewing the report with a view to providing a detailed response to the issues raised by the Central Bank of Kenya within the stipulated period.
We wish to reassure our stakeholders as a responsible corporate citizen and a regulated entity, DTB respects and complies with all laws and applicable regulatory guidelines.
We also wish to confirm that the Bank respects and adheres to the rules and regulations of all the countries in which we operate.
We remain committed to providing our customers and stakeholders with excellent service coupled with utmost respect while adhering to the banking laws and regulations as stipulated in each of the markets we operate in and global best banking practices.
We remain committed in our unwavering support to the government in its effort to eradicate corruption and to uphold the integrity of the financial system in order to build a strong stable secure financial system.
Nasim Devji,
Group Chief Executive Officer and Managing Director, DTB Group.
