The Central Bank of Kenya (CBK) has taken regulatory action against Absa Bank Kenya due foreign exchange trades that were conducted in March 2020.
According to a statement released by the CBK, Absa Bank failed to provide information about some trades it executed in March. They also noted that the bank did not have satisfactory assurance of the underlying commercial transactions supporting the trades. it also did not conduct the standard checks on anti-money laundering, Know Your Customer (KYC) requirements were also not applied.
As such Absa was required to take the following measures;
- Ensure a framework that ensures that all the relevant documents for such forex transactions are available as require. Also ensre that anti-money laundering and KYC requirements are adhered to.
- Reverse the market positions created due to the transactions. Basically they are supposed to reverse the entire transaction that was flagged.
- They have also been ordered to stop transacting as authorized forex dealers in Kenya as from today to 15th April 2020. During this time, they cannot transact in the interbank forex market. However, all transactions committed as at 8th April 2020 can be settled.
The CBK also noted that Absa Bank had acknowledged its obligations as an authorized foreign exchange dealer and was committed to addressing the underlying issue noted.