Absa bank Kenya has been listed by the Central Bank of Kenya (CBK) for involving in irregular foreign exchange trades for the months of March.
CBK said on Thursday that it conducted investigations into the lenders activity, which have shown that the bank did not follow standard checks for transaction authenticating.
“It is evident that Absa Kenya did not have satisfactory assurance of the underlying commercial transactions supporting these trades, as it is required, nor did the bank ensure standard checks on anti-money laundering and combating financial terrorism (AML/CFT) guidelines and know your customer (KYC) requirements,” read part of a statement send to newsroom by CBK.
The reserve bank has suspended Absa Bank Kenya as an authorized foreign exchange dealer for a period of one week effective Thursday 9, as it orders the lender to reverse the market positions created from the flagged transactions.
The foreign investor, which changed its name from Barclays, has been ordered to put in place a robust framework to ensure the availability of all relevant documents relating to foreign exchange transactions.
CBK announced the purchase of a maximum $100 million (Ksh.10.6) billion per month early in March, linking the depreciation of the local unit to confusions among dealers and malicious transactions.
“We expected a reduction on the demand of US dollars from significant savings made from oil importers. We therefore expected to build our reserves without destabilizing the market. Some dealers understood this. There also has been some indiscipline from malicious actors in the market,” said CBK Governor Patrick at a past event.