Money Laundering Tough Laws Approved By Banks.

The legislators have plans to hold Central Bank of Kenya (CBK) stringent anti-money laundering laws which have now received heavy support from Commercial Banks. Joshua Oigara the Sector lobby Kenya Bankers Association stated that the laws these laws are fundamental when it comes to preserving the integrity of the banking system. “We are behind these rules. We have to protect our financial sector,” said Mr Oigara.

The lenders involved Standard Chartered Kenya, Equity Bank, Diamond Trust Bank and Co-operative Bank, who were penalized for allegedly not following the proper procedures laid out when they aided to transfer Sh8 billion, money that is said to have been stolen from National Youth Service. Oigara says that KCB has already settled the fine and has gone ahead to adjust their internal systems and beefed up its monitoring of transactions.

In a statement made last month by Patrick Njoroge the Governor of Central Bank, he opposed the bid by MPs looking to lessen the impact of the anti-money laundering laws, saying that the proposed amendments were going to frustrate the fight against corruption and separate Kenya’s banking sector from global financial systems.

MPs were informed by the CBK boss that the country risks being perceived as a people who embrace money laundering and financing or terrorism if it were to implement the changes proposed by the legislators six months ago. “The adverse effect of the amendment on the banking sector would be immediate termination of relationships by foreign correspondent banks and closure of accounts of Kenyan banks ” he said addressing the National Assembly’s Finance Committee.

According to the laws of Kenya, all financial bodies inclusive of banks, insurance companies and saccos are required to file daily reports with the Financial Reporting Centre for transactions above Sh1 million and anyone who may come across as a suspect. Failure to this, one is liable to pay a fine of Sh1 million and in addition a three-year jail sentence. The fine could go as high as Sh20 million upon convictions and banks risk having their licences revoked. This was strengthened by President Uhuru’s order to toughen new sanctions against any persons and institutions who flout the anti-money laundering laws.