The Central Bank of Kenya (CBK) has suspended Absa Bank Plc from transacting as an authorized forex dealer for five working days over flouting anti-money laundering regulations, the monetary policy regulator said on Thursday.
In a statement, CBK said Absa Bank Plc failed to provide information about specific foreign exchange trades that it conducted in March 2020 and failed to ensure the standard checks on anti-money laundering and combating terrorism financing regulations.
“In investigating this and earlier transactions, it is evident that Absa did not have the satisfactory assurance of the underlying commercial transactions supporting these trades as is required,” read the statement.
To that effect, CBK has ordered Absa to cease trading as an authorised forex dealer for five working days- Thursday, April 9, 2020, to Wednesday, April 15, 2020.
CBK says during this period, Absa has been banned and cannot transact in the inter-bank foreign exchange market. However, the regulator has allowed the lender to settle committed transactions as at April 8.
Absa has also been ordered to reverse the market conditions that were created as a result of the flagged transactions.
In February, the lender officially rebranded to Absa Bank Kenya Plc from Barclays Kenya and changed its ticker code from BBK to ABSA at the Nairobi Securities Exchange (NSE).
The re-branding had been in the pipeline for a while after London based Barclays Plc ceased being the majority owner of Barclays Kenya after selling 53.6% of its stake to South Africa based Absa Group in July 2018.
In March 2019, before the rebrand to Absa, Barclays was forced to do away with its safety deposit boxes service after the Directorate of Criminal Investigations (DCI) seized Ksh2 billion in fake currency from one of its account holders.
The whole episode attracted a lot of negative limelight for the lender and it remains to be seen how the bank will navigate the latest public relations hurdle.