A local commercial bank has been put under a tight watch of the Central Bank of Kenya (CBK) over claims that it is a conduit of criminal activities.
Investigations by the editor of this site reveal that the African Banking Corporation (ABC) Limited has been undergoing CBK audits, stress checks and risk tests, putting questions into the dealings that the institution.
While sources at the Central Bank say the bank’s “questionable” practices are not a “copy-paste” of the Imperial Bank, which was put under receivership a few years ago, but to some degree, the activities of the two financial institutions resemble.
“This is an early stage which we do not want to divulge further information on,” said a CBK source at the Department of Bank Supervision in an interview.
At the centre of the audits and tests were the bank’s liquidity position, its capital adequacy, both of which CBK says is sufficient. “However, this is undone by some stains emanating from questionable activities, which make us think the bank and some of its owners could actually be part of an international ring that launders money.”
Indeed, a confidential exchange between the Central Bank of Kenya and the United States Government with the subject: Bank Fraud & Money Laundering in the East African region adversely mentions ABC bank as one of the platforms through which drug dealers, pirates and other criminals clean their cash.
“Money laundering within commercial banks is on the rise in Kenya and the greater East Africa. This is a matter of huge concern to not only Kenya but also the US government,” read part of the exchange, signed off by a Mr Paul J of the US State Government.
In its website, African Banking Corporation says it provides banking services to large corporations, medium-sized businesses, small business enterprises as well as individuals. As at 2013, the bank was ranked number 23, by assets, out of 43 commercial banks in Kenya.