Parliament has ordered the anti-graft agency to investigate 29 commercial banks that handled billions of shillings stolen from the National Youth Service (NYS).
National Assembly’s Public Accounts Committee (PAC) has directed the Ethics and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to conduct forensic investigations on banks that received funds from the Ministry of Devolution and the NYS at the height of the nearly Sh2 billion scandal.
Manipulation of the government’s financial management software, outright forgery including zeroes added to others to increase ten-fold the amounts to be paid and neglect of duty enabled the theft of Sh1.8 billion from the NYS, the Auditor-General has revealed.
The NYS cash moved through commercial banks into individual pockets and ultimately was used to buy personal assets with cash withdrawals of Sh100 million being made per day by a single borrower.
Financial institutions are required to report all transactions above $10,000 to The Financial Reporting Centre, but most are not reporting.
The Central Bank of Kenya (CBK) slapped three commercial banks with a total fine of Sh3 million for failing to report suspicious transactions relating to the NYS scandal.
CBK Governor Patrick Njoroge is also facing a probe for failing to prevent movement of stolen funds through the banking system.
The banks named by PAC as having handled the cash include African Banking Corporation, Bank of Africa, Bank of Baroda, Barclays, CFC Stanbic, Chase Bank, Consolidated, Co-operative Bank, Credit Bank, Ecobank, Equity and First Community Bank.
Others are Guaranty Trust Bank, Gulf African, Housing Finance, I&M, Jamii Bora, NIC, Paramount, Sidian, Standard Chartered, Transnational, Faulu, Old Mutual and National Bank of Kenya.