Kenya’s recent inclusion in the Financial Action Task Force (FATF) ‘grey list’ has raised concerns among local banks, highlighting potential hurdles in compliance and international transactions.
Moody’s, a leading ratings agency, warns of increased costs for Kenyan banks due to heightened scrutiny and potential loss of correspondent relationships. Notably, KCB Bank Kenya, Equity Bank (Kenya) Limited, and Co-operative Bank of Kenya Limited may face intensified reviews from correspondent banks, possibly leading to transaction delays.
While Kenya previously addressed grey list concerns in 2010, recent setbacks underscore the need for ongoing regulatory improvements. To counter this, the Treasury commits to implementing FATF’s Action Plan, aiming for a timely exit within two years.
The Central Bank of Kenya (CBK) strengthens penalties for Banking Act violations, signaling a tougher stance. International support from the IMF and World Bank will aid Kenya in addressing deficiencies.
Kenya’s path forward involves enhancing regulatory frameworks, bolstering anti-money laundering measures, and establishing dedicated compliance monitoring. Amid challenges, maintaining correspondent relationships and meeting compliance remain pivotal for Kenyan banks striving to regain global trust.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
12th March, 2024
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