This archive report was first published on 6 November 2019.
Published on November 6, 2019, a report by Financial Sector Deepening (FSD) has exposed a worrying trend in Kenyan banks, where lenders are allegedly covering up fraud and circumventing Central Bank of Kenya (CBK) regulations.
The report, titled 'Inclusive Finance?', draws its observations from the Finaccess 2019 Household Survey jointly authored by the Central Bank of Kenya (CBK), the Kenya National Bureau of Statistics (KNBS), and FSD. It reveals that banks are aware of fraudulent activities within their ranks but are choosing to remain tight-lipped.
According to the report, 220,000 bank account holders have reported losing their money from their accounts this year, accounting for 3% of bank users in Kenya. However, 75% of them were able to recover their money after engaging their banks.
These findings raise questions about the safety of depositors' money with lenders, especially in light of the Office of the Director of Public Prosecutions (ODPP) implicating a large number of Kenyan banks in the National Youth Service (NYS) heist earlier this year.
CBK has since published new regulations requiring banks to report fraud within two hours, aimed at protecting the economy from cyberattacks that have become more prevalent in the last five years.
One such incident occurred on October 1, when the Directorate of Criminal Investigations (DCI) arrested three suspects believed to have stolen Ksh970,000 from a 73-year-old woman's Equity Bank account using the bank's Eazzy Pay app.
