JOHANNESBURG - The Central Bank of Kenya (CBK) has on Thursday suspended Absa Bank Kenya’s foreign exchange licence for failing to report specific foreign exchange trades it conducted in March.
In a statement posted on the CBK Twitter account, CBK governor Patrick Njoroge said Absa is required to cease transactions as an authorised foreign exchange dealer in the Kenyan market for seven days.
"During this period, Absa cannot transact in the inter-bank foreign exchange market. However, all committed transactions as at April 8, 2020, can be settled," Njoroge said.
Njoroge said Absa flouted the anti-money-laundering rules during the trades, hence the sanctions.
He said Absa did not have satisfactory assurance of the underlying commercial transactions supporting these trades, as is required.
The bank has been ordered to reverse the market positions that were created as a result of the flagged transactions.
By next week Wednesday Absa is required to put in place a robust framework that ensures all relevant documents for such foreign exchange transactions are available and to ensure the other requirements are adhered to.
Njoroge said Absa'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," said Njoroge.
This move comes barely three months since transforming from Barclays.
The lender is expected to complete the rebranding and transition process before June 2020.
Absa has been undergoing a transition after parting ways with Barclays Plc, which reduced its shareholding in the African financial services group to a minority stake in 2017, according to The Star.
Barclays Africa operates in 12 countries with approximately 40,000 employees who serve close to 12 million customers.