Standard Chartered Bank, the parent company to the Kenyan bank, has been fined £102.2 million (~KSh13.5 billion) by the Financial Conduct Authority (FCA) for lacking proper controls against money laundering in some of its branches.
According to the British financial regulator, the bank failed to put in sufficient measures against money laundering in its UK Wholesale Bank Correspondent banking segment and UAE based branches. In a statement to the press, the regulator said, “The FCA has found serious and sustained shortcomings in Standard Chartered’s AML controls relating to customer due diligence and ongoing monitoring. Standard Chartered failed to establish and maintain risk sensitive policies and procedures, and failed to unsure that its UAE branches applied UK equivalent AML and counter terrorist financing controls.”
UK law requires the international lender to apply the same strict Anti-Money-Laundering standards in its global branches and subsidiaries spread out in more than 60 markets.
Financial regulators across the world have stepped up the fight against financial crimes such as money laundering and terrorism financing by setting high standards for financial institutions in their jurisdictions. The Central Bank of Kenya has instructed banks to take necessary precautions against illegal financial transactions. In 2018, CBK charged the Kenyan subsidiary of the Standard Chartered Bank KSh77.5 million for handling proceeds from the NYS scandal.