As unpenetrable as they may look with billions in deposits as cash, financial assets and minimum reservations locked away in the vaults, banks are still vulnerable to money heist, fraudsters and in most instances bankruptcy, that has seen quite a number disappear into smithereens.
With the Central Bank of Kenya, closely monitoring the operations of banks in Kenya ensuring that they meet the minimum threshold for their existence, some banks have suffered heavily in the hands of negative publicity, that for some it affected their credibility while for others they perished in the fiasco.
Here are some of the Banks that have been victims of this circumstance.
1.Kenya Commercial Bank
News of the KCB Thika Branch heist came to the public’s attention on November 19. It was revealed later that robbers had been digging a tunnel which they used to rob over Ksh 52 Million from the bank’s vault. The robbers had been running a shop next to the bank, disguised as a book shop.
Last year, KCB was caught up in the NYS scandal. KCB was slapped with the highest penalty for channeling money stolen from the Government through the scam and was required to pay Sh149.5 million for processing amounts of up to Sh639 million.
2. Barclays Bank
Last month, a fake currency syndicate that shocked the city was discovered by the Flying Squad investigating into the matter in Barclays bank’s Queensway branch. Director of Criminal Investigations George Kinoti reported that Sh2 billion in fake US dollars was found stashed in Barclays Bank client’s safe deposit box.
Just the other day Barclays Bank of Kenya confirmed several incidents of theft of cash from their ATMs in Nairobi, in which more than Sh11 million is reported to have been stolen.
3. Chase Bank
The retail Bank was placed under receivership after running into financial difficulties. So much happened prior to the bank going under, with a huge number of depositors- especially small and medium-sized businesses that banked with Chase Bank left suffering dearly. On the eve of its collapse, the Chase Bank management had pleaded for an Sh10 billion loan to sort out liquidity but was denied by Central Bank of Kenya and that became its sudden demise.
4. Imperial Bank
When CBK became aware of unsafe business conditions in the bank, it culminating to the decision to take over its management placing Imperial Bank under statutory management effectively removing Sh58 billion from circulation, which raised queries over its possible impact on liquidity in the money markets. This decision sent shockwaves across the banking system, which stormed on the day Imperial Bank bond was to list at the Nairobi Securities Exchange (NSE) forcing the Capital Markets Authority (CMA) to suspend its listing.
5. National Bank
In 2017, The National Bank of Kenya suffered losses estimated at Sh300 million last year orchestrated by fraudulent employees and cybercrime attacks, as revealed by the lender. A report by the bank disclosed that the risks are inherent in the ICT systems used by the bank people relied on to perform certain activities, processes being used and exposure to threats from the external environments where the Bank operates.
6. Dubai Bank
Dubai Bank was placed in receivership after it flouted recommended cash reserve ratios. During the receivership, CBK found out that the bank had a massive hole due to non-performing loans, including one by failed presidential hopeful Cyrus Jirongo, who owed the lender Sh495 million. The Bank was also unable to meet its financial obligations, including the repayment of Sh48.1 million owed to Bank of Africa Kenya.
Equity Bank was caught up in the NYS scandal, accused of processing Ksh 886 million from the scheme. CBK sapped the Bank with Ksh89.5 million for being involved in government malpractices. The bank has also been on the spotlight for pathetic customer services that have seen it drop off the radar in a while.
8. Standard Chartered
Due to little or no due diligence on the customers, they handed cash to and sometimes handed over large sums of money without appropriate documentation, Standard Chartered also caught up in the NYS scam processed Sh1.62 billion but was fined Sh77.5 million.
9. Cooperative Bank
Based on the lenders’ failure to report large transactions that would have raised a red flag to relevant investigating authorities, Co-operative Bank was found guilty of helping divert Sh263 million in the scandal and was fined Ksh20 million.
10. Diamond Trust Bank
With a duty to report large transactions, Diamond Trust Bank contravened its mandate by not reporting transactions that exceeded Sh1 million to the Financial Reporting Centre which saw it pay Sh56 million for transferring Sh162.5 million to NYS suspects’ accounts.