The five banks penalised
in September over suspicious transactions relating to the National Youth Service scandal have lost a bid to block the fines.
The Central Bank of Kenya (CBK) on Friday said the banks presented insufficient responses on why they should not be penalised.
"CBK has reviewed each bank’s response to the penalty assessment and has concluded that the submissions were not sufficient to alter the findings of the investigations and the penalties assessed. Consequently, CBK has levied the penalties as assessed," CBK said in a statement to the media.
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The banks are Standard Chartered, Equity
Bank, KCB, Co-operative Bank, and Diamond Trust
Bank.
CBK Investigations revealed that they handled the largest flows and violated anti-money laundering regulations in the NYS transactions amounting to Sh3.5 billion.
"CBK assessed monetary penalties for each of the five banks in accordance with the extent of the violations that were identified and pursuant to CBK’s powers under the Banking Act and the Central Bank of Kenya Act," read part of the statement.
On September 12, the regulatory body said the banks failed to comply with the requirements of Kenya's Anti-Money Laundering/Combating Financing Terrorism laws and regulations.
It said the banks will be penalised Sh392.5 million against a transaction value of Sh3.578 billion.
While Standard Chartered Bank transacted Sh1.628 billion on its account, it was penalised Sh77.5 million.
Equity Bank is said to have transacted Sh886 million and will pay Sh89.5 million in fines.
KCB transacted Sh639 million and will pay Sh149.5 million in penalties.
Co-operative Bank transacted Sh263 million and will pay Sh20.0 million while Diamond Trust Bank transacted Sh162 million and will pay Sh56.0 million.
"The actions taken by CBK are aimed at safeguarding stakeholders’ interests and maintaining a healthy financial sector," the statement said.
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