NAIROBI (Xinhua) --
Commercial banks in Kenya are on the spot over their role in
multi-million corruption scandals that have rocked the East African
The banks are said to have aided corruption
suspects to launder close to 90 million U.S. dollars of dirty cash
from the National Youth Service (NYS).
The money, according to police investigations, was wired from the
accounts of the state youth agency at the Central Bank and withdrawn
at different commercial banks.
Police have flagged down at least six banks that handled the
cash, with the Director of Public Prosecutions noting bank officials
would not be spared in the ongoing probe.
On Tuesday, the government rounded up at least 40 suspects linked
to the scandal and charged them in court.
The judge ruled that the suspects should remain in police custody
until June 5 when the court would determine if they will be released
However, missing among the suspects were bank officials and
employees that handled the cash, prompting public outcry.
Without the banks, analysts have argued that the money would not
have been transferred and pilfered.
The banks are, therefore, deemed to have been at the center of
the corruption scandal.
"How come these banks did not flag down the transactions
involving millions of U.S. dollars yet the rules say the Central
Bank must be notified in case of suspicious cash movement," Martin
Munene, a pharmacist in Nairobi, wondered on Wednesday.
Munene noted that when ordinary citizens seek to transact even
5,000 dollars or 10,000 dollars, the banks ask several questions,
including source of the cash.
"The failure to stop such transactions can only point to
collusion," he observed.
On Tuesday, the Central Bank asked the commercial banks linked to
theft of public resources to carry their own cross.
Central Bank governor Patrick Njoroge said that commercial banks
which were used to process and ship out the cash must prepare for
He said laws on handling the proceeds of graft were clear to all
chief executive officers thus the top officials of institutions that
flouted the rules are personally liable.
"The chief executives are under oath that they understand and are
compliant with these laws.
"There cannot be any excuse that one does not understand them,"
said Njoroge, noting the apex bank and the Director of Criminal
Investigations are probing the NYS transactions.
Citizens have called for arrest and prosecution of the bank
officials involved to end corruption.
They noted the banks are being treated as ‘sacred cows’ yet their
officials are at the center of the crime.
"Kenyans must shelve all these praises for the ongoing
investigations until police go for the big fish.
"We are tired of this small fish drama.
"So long as the bank officials are still free and the Cabinet
Secretary, we are headed nowhere in curbing graft," said Triza Omore
on Twitter as the scandal continues to hog debate on social media.
"I cannot even withdraw 0.10 dollars from my mobile account
without my Identity Card yet some criminals withdrew million of
dollars of stolen taxpayers money from commercial banks, and the
institutions have not paid for it.
"What is happening?" posed Simon Kameni on Twitter.
In 2016, at least two commercial banks were fined 30,000 dollars
each by the Central Bank for aiding theft of 10 million dollars in
the first scandal at the NYS, which has seemingly become a gravy
train for the corrupt.
Analysts, however, observed that such fines are too little for
commercial banks, therefore not a deterrent enough.
"What is 30,000 dollars to a bank that makes millions of dollars
"Bank officials need to pay the highest price for the crimes if
the country is to decisively fight graft," said Henry Wandera, an
economics lecturer in Nairobi.
Kenya has a vibrant banking industry with a total of 42 financial