Economy

House team grills GT Bank staff over Sh791m NYS scam

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Central Bank of Kenya slapped GT Bank with a Sh1 million fine in connection to the theft at the NYS. PHOTO | FILE

Top managers of the Guaranty Trust Bank (GT Bank) were Monday evening grilled in camera over transactions relating to the loss of Sh791 million at the National Youth Service (NYS).

The National Assembly Public Accounts Committee (PAC) asked GT Bank managers to explain why the Central Bank of Kenya (CBK) slapped it with a Sh1 million fine in connection to the theft at the NYS.

Managing director Ibukunoluwa Odegbaike asked the committee to conduct the hearings in camera given that she was going to release the names of persons who transacted with the bank in connection to the proceeds of NYS.

The committee was divided on the bank’s request to be heard in camera, but the MPs eventually allowed the lender to present its case in a closed session.

Through lawyer Cecil Miller, Ms Odegbaike drew the attention of the committee that the CBK prudential guidelines prohibits banks from disclosing client information to third parties.

“We want to apply that the bank qualifies for exceptional circumstances to sit in camera.  The bank is under obligation to keep information of customers confidential,” Mr Miller told the committee chaired by Rarieda MP Nicholas Gumbo.

“We have sensitive information and we are wary of protecting the bank clients. We cannot expose customers and the institution.”

He said the issues raised in invitation by PAC bring in other entities including bank clients who are not necessarily subject to the investigations.

“The bank will fall foul of the rule of confidentiality. I am aware the committee has allowed other banks to submit information in camera,” said Mr Miller.

“In as much as matter is in public domain, the client information in our bundles that we have brought here are not in public domain.”

Central Bank of Kenya governor Patrick Njoroge had informed MPs that GT Bank, Family Bank and Jamii Bora Bank had been fined Sh1 million each for flouting the CBK prudential guidelines.

The PAC sought to know the names and the bank statements of all individuals and businesses that received money from NYS in 2013/14 and 2014/15 financial year.

The MPs also wanted evidence on whether the bank conducted due diligence in handling of the NYS funds and proof that disciplinary action was taken on any staff involved in the fraud.

Mr Gumbo drew the attention of MPs to a letter GT Bank wrote to Speaker of the National Assembly Justin Muturi on October 3 asking to be allowed to testify behind closed doors.

Mr Muturi said whereas the requests had merit, the committee should deliberate the circumstances under which the bank is seeking to be allowed to provide information in camera.