Chief executives and employees of banks who helped ship out billions of shillings from the National Youth Service (NYS) will be arrested and prosecuted, the Director of Public Prosecutions (DPP) Noordin Haji has said.
The announcement comes a day after the Central Bank of Kenya (CBK) fined five commercial banks a total of Sh392.5 million in connection with the theft of funds at the NYS.
“Those implicated will be prosecuted,” Mr Noordin told the Daily Nation in an interview on Thursday.
The law requires all financial institutions including banks, insurance companies and Saccos to file with the Financial Reporting Centre (FRC) daily reports on transactions above Sh1 million and those deemed suspect.
Bank executives and persons who are convicted for handling illicit cash face a Sh1 million fine and a three-year jail term, while institutions including banks, credit unions facilitating such deals could be fined up to Sh20 million upon conviction. Banks could also lose their licences.
CBK earlier Wednesday said the findings of its investigations had been passed onto investigators to assess whether they would bring any charges.
Those penalised are KCB Group (Sh149.5 million), Equity Bank (Sh89.5 million), Standard Chartered Bank-Kenya (ShSh77.5 million), Diamond Trust Bank (Sh56 million) and Co-operative Bank of Kenya (Sh20 million).
“The second phase of the investigations will involve use of these findings by other investigators, inter alia, assessment of criminal culpability by the Directorate of Criminal Investigations (DCI) and the Office of the Director of Public Prosecutions (ODPP),” CBK said in its statement. The CBK also said more banks would be investigated.
On Thursday, several commercial banks heads and boards were understood to have convened crisis meetings to assess their compliance levels with anti-money laundering guidelines as panic spread after the CBK announcement.