Ecobank has been ordered to cease transactions as an authorised foreign exchange dealer in the Kenyan market from Tuesday, March 29, 2022, to Monday, April 4, 2022 by the Central Bank of Kenya (CBK).
This follows unsafe trading practices and breaches to the Prudential Guidelines on Foreign Exchange Exposure Limits in March 2022 by the lender.
“In investigating Ecobank’s trading practices and a specific transaction that it had concluded, it is evident that Ecobank did not have sufficiently robust risk controls to prevent breaches on its foreign exchange exposure limits, or the inaccurate reporting of its position,” said CBK in a statement.
During this time, Ecobank cannot transact in the interbank foreign exchange market. However, all committed transactions as at March 28, 2022, can be settled.
As a result, Ecobank has been put in place a remedial plan to ensure the operational
lapses that led to the non-compliance are addressed by Thursday, March 31, 2022.
The remedial plan should also point to specific measures to address the unsafe trading practices that led to the noncompliance and to enforce adherence to orderly conduct as stipulated in CBK’s Guidelines on Foreign Exchange.
The lender has also been ordered to reverse the amount of additional exposure that was created as a result of the regulatory breach.
“Ecobank’s acknowledgement of its obligations as an authorised foreign exchange dealer and its commitment to address the underlying issues is noted. CBK reiterates the objective
of building sound, fair and transparent financial markets, anchored in the law and according to global best practices,” added CBK.