The Central Bank of Kenya has temporarily suspended Absa Kenya’s foreign exchange dealer licence for seven days over a failure to implement standard checks against money laundering, among other things.
The suspension is effective of 9 April and will continue to 15 April. Kenya’s central bank had taken regulatory action against the bank as it failed to provide information on some foreign exchange trades conducted in March 2020.
“In investigating these and other earlier transactions it is evident that Absa Kenya did not have satisfactory assurance of the underlying commercial transactions supporting these trades, as is required, nor did the bank ensure the standard checks on anti-money laundering and combating the financing of terrorism (AML/CFT) and know-your-customer (KYC) requirements were applied,” it said in a statement issued on Thursday.
In response Absa Group said its subsidiaries “embrace” a culture that aims to comply with national and international regulations. “We have stringent and world benchmarked Anti-Money Laundering CFT policies which are applied rigorously in all our operations,” the group said.
Absa had cancelled the two foreign exchange transactions concerned, after being alerted by the central bank, it added. “These were being executed on behalf of highly reputable global financial institutions, which are regulated in line with best international practice.
“The transactions were executed at prevailing market rates. This was done to demonstrate our willingness to address fully the concerns of the regulator,” Absa Group said.
The group is having ongoing discussions with the central bank to resolve the matters raised.
The central bank expects Absa Kenya to put in place a “robust framework” to ensure all relevant documents for the foreign exchange transactions in question are available and to ensure all standard checks are in place in relation to anti-money laundering, combating the financing of terrorism and know-your-customer requirements.