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CBK puts Absa on spot over suspicious FX transactions

By Zachary Ochuodho
Friday, April 10th, 2020
Absa Bank Kenya.
In summary
    • This was in response to raft of measures which CBK had set for the bank’s foreign exchange dealer license before they are allowed to resumes its operations.

Absa Bank Kenya Ltd has cancelled two foreign exchange forward transactions after Central Bank of Kenya (CBK) raised concerns leading to suspension of the foreign exchange dealer license for a period of seven days.

This was in response to raft of measures which CBK had set for the bank’s foreign exchange dealer license before they are allowed to resumes its operations.

Absa Kenya said yesterday in a statement that the group and all its subsidiaries embrace a culture that endeavours to comply with national and international regulations at all times.

“We have stringent and world benchmarked Anti-Money Laundering/CFT and KYC policies which are applied rigorously in all our operations,” the statement read in part.

Absa Bank Kenya said when CBK raised its concerns, pending resolution of the concerns raised the bank decided to proactively cancel the two foreign exchange forward transactions concerned.

CBK investigations say Absa Kenya could not explain satisfactorily the underlying commercial transactions supporting these trades as is required.

It further said the bank did not ensure the standard checks on anti-money laundering and combating the financing of terrorism (AML/CFT) and know-your-customer (KYC) requirements were applied.

Absa Bank Kenya said all these things were being executed on behalf of its reputable global financial institutions, which are regulated in line with best international practice.

“The transactions were executed at prevailing market rates. The decision to cancel the transactions was taken to demonstrate our willingness to address fully the concerns of the regulator,” said Absa.

The banks said they will work in consultations and discussions with CBK to fully resolve all matters raised in the shortest possible time.

CBK, however, said all committed transactions as at April 8, 2020 can be settled and that Absa Kenya acknowledges its obligations as an authorised foreign exchange dealer and its commitment to address the underlying issues is noted.

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