Central Bank seeks faster prosecution of bank fraud suspects

The Central Bank of Kenya (CBK) has called for the establishment of a special court to handle financial and economic crimes.

According to the banking regulator this will accelerate the prosecution of fraud cases and serve as a deterrent especially for banks found to be facilitating proceeds of fraud and crime.

Speaking during the Accountability Summit at Statehouse on Tuesday, CBK Governor Dr Patrick Njoroge said the financial crimes court will ensure that money lost through graft is recovered in a timely manner.

“We have specific cases that we have brought to court and there are others that will be coming and this can be accelerated and cleared in a matter of weeks instead of waiting for years. At the end of five years there’s virtually nothing and all the securities you had wanted are not there,” Dr Njoroge said.

The most high profile case the regulator is after is the asset recovery process for collapsed Imperial Bank.

The CBK is seeking to recover Sh45 billion from the directors and shareholders with fears that the lethargic judicial process could stall progress.

At the same time, Dr Njoroge said there was need to strengthen bank supervision to ensure that banks are not used to facilitate money laundering or process proceeds of graft.

“We have improved some specific guidelines especially on large cash transactions which seemed to be one of the ways the transactions were being conducted,” he said.

His sentiments were echoed by former investment banker and Kenya Pipeline Chairman John Ngumi who said the Central Bank and prosecuting agencies ought to go after bank chief executives whose institutions are found aiding financial crimes.

“There is nothing that will induce banks to behave as fast as action on individuals at the top and it’s just happened in the U.S,” Mr Ngumi said.

KCB Group CEO Joshua Oigara endorsed the move saying banks need to become more accountable in the role they play.

“I think it’s high time to take banks fully responsible for the actions they take and all the transactions. We haven’t seen that action I think the governor has been pushing for that action but it needs to go beyond sanction. It has to go into prosecution,” Mr Oigara said.

Atleast three banks have been under investigation over the role they played in the looting of funds from the National Youth Service (NYS).