Family Bank will have to pay Ksh40 million to the court and Ksh24.5 million to the National Youth Service for failing to report unusual transactions in its accounts. Between 22 December 2014 and 19 May 2015, illegal transactions of up to Ksh1.6 billion involving NYS funds were transacted through the bank. Family Bank did not report the matter to the relevant authorities as required by law.
The bank reached a plea bargain agreement with the Director of Public Prosecution where it pleaded guilty to the charges and was relieved of criminal prosecution. The matter was settled in Milimani law courts. The Second tier bank had sought to have the matter settled out of court but the Director of Public Prosecutions turned down the request.
An article on Capital FM states that Family Bank is one of eight Kenyan Banks that negotiated a plea bargain agreement with the Director of Public Prosecutions for facilitating the NYS scandal. Other lenders found to have committed folly against banking laws were, “Standard Chartered Bank, Equity Group, KCB Group, Co-operative Bank of Kenya limited and Diamond Trust Bank.”
KCB Group paid the highest fine of Ksh149.5 million in connection with the transactions. Co-operative Bank paid the least fine of Ksh20 million.
Family Bank is yet to announce a replacement for its CEO, David Thuku, who resigned in September 2018 to pursue personal interests.