Commercial banks in Kenya have reaffirmed their support for the Central Bank of Kenya's (CBK) stringent anti-money laundering regulations, despite ongoing legislative efforts to modify the framework. The Kenya Bankers Association (KBA) chairman, Joshua Oigara, emphasized the importance of these measures in maintaining financial system integrity.
Oigara, also serving as KCB Group managing director, stated that banks recognize the necessity of compliance. This comes as the CBK enforces rules requiring daily reporting of transactions exceeding Sh1 million and suspicious activities. In 2019, five banks—including KCB, Standard Chartered Kenya, Equity Bank, Diamond Trust Bank, and Co-operative Bank—were penalized for facilitating the transfer of Sh8 billion in stolen National Youth Service funds.
The CBK has warned that proposed legislative amendments to relax these regulations could jeopardize Kenya's financial standing. Governor Patrick Njoroge cautioned that foreign banks might terminate relationships with Kenyan institutions, leading to account closures and de-risking. He highlighted that Kenya risks being perceived as tolerant to money laundering and terrorism financing if the proposed changes are implemented.
The regulations mandate financial institutions to submit daily reports on transactions above Sh1 million and suspicious activities. Violations carry severe penalties, including fines up to Sh20 million for institutions and up to three years in prison for individuals involved in handling illicit funds.
