Ten commercial banks suspected to have allowed transactions of huge amounts of cash in the Sh9 billion scam at the National Youth Service (NYS) are being investigated and risk losing their operating license if found culpable.
The Directorate of Criminal Investigation (DCI), the Central Bank of Kenya (CBK) and Kenya Revenue Authority (KRA) have launched a joint probe to establish the lenders’ role in the scandal.
Central Bank of Kenya (CBK) said tough actions will be taken on any banks found to have broken the law by authorising transaction of cash in the scandal.
“We are collaborating with investigating agencies to get to the bottom of the NYS tender scam which has resulted into loss of billions of shillings, banks involved in suspect activities will be dealt with,” Central Bank of Kenya Governor Patrick Njoroge said during a press briefing earlier this week.
“We have provided banks with rules regarding Suspicious Transaction Reports and how to flag large frequent unusual transactions. How else could you make a mistake of things you are already aware of?”
CBK regulations requires banks to seek explanation from any customers withdrawing more than Sh999,999 at a go.
The Nation reports that Stanbic Bank, Kenya Commercial Bank (CBK), Standard Chartered and Barclays Bank are some of the banking institutions being probed.
Others include Diamond Trust Bank, Equity Bank, Co-operative Bank, and Consolidated Bank.
On Tuesday, more than 30 suspects were arraigned in court in connection to the scandal and being remanded until next Wednesday, when the court will rule on bail applications.
Among those paraded in court was Youth Affairs Principal Secretary Lillian Omollo and NYS Director-General Richard Ndubai.
