Blow to Equity bank, fined Ksh 26.2 million for money laundering claims

Kenya’s Equity and I&M bank have suffered a major blow after being fined 56 million for acting against money laundering rules in Tanzania.

The two are among five banks fined for failure to conduct proper customer due diligence and file suspicious transaction reports to the Financial Intelligence Unit in Tanzania.

I&M Bank was fined Ksh29.5 million, Equity Bank Ksh26.2 million, UBL Bank Ksh14.6 million, Habib African Bank Ksh7.9 million and African Banking Corporation Ksh6.5 million.

“The Bank of Tanzania (BoT) has imposed monetary penalties on five banks for breach of regulations 17, 22 and 28 of the Anti-Money Laundering Regulations, 2012 for failure to conduct proper customer due diligence and file suspicious transaction reports to Financial Intelligence Unit (ETU),” BoT said in a statement.

On top of the fines, the banks will be required to take disciplinary actions against staffers who were involved in opening implicated deposit accounts contrary to KYC (know your customer) requirements.

The International Monetary Fund faults almost half of Tanzania’s 45 banks, saying they are vulnerable to adverse shocks and risked insolvency in the event of a global financial crisis.

So far, Tanzania’s Central Bank has revoked the licenses of at least nine banks since 2017.