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Senate To Grill CBK, Bank Managers Over Rising Fraudulent Withdrawal Of Funds
22/02/2023 22:00 in Business News

Senators are now demanding that the Central Bank of Kenya (CBK) and bank executives clarify suspicions of fraudulent activity involving customer accounts at various Kenyan banks.

 

Nominated Senator Tabitha Mutinda issued a statement urging the Finance Committee to investigate reports of fraudulent withdrawals of monies from client accounts at various Kenyan banks.

 

She cited proof of complaints from numerous clients who claimed unlawful transfers were made in their bank accounts.

 

"We wish to fix these problems long term and short term and deal with this issued issues deeply to discover where did the problem arise. What are the measures that have been implemented? "It's a very terrible situation," Mutinda said.

 

Marion Nyambura Karanja's account at the Gikomba Branch was wiped out of about Sh700,000, according to the Vice Head of the Finance Committee.

 

In a similar case, she referenced Matthew Mathia, whose pension funds were used to pay for a debt acquired fraudulently against his account at the Limuru Branch.

 

"In this economy, there is nothing more terrible than losing money from a bank. People lose trust in the bank, where they expect their money to be safe," Mutinda observed.

 

The nominated senator has complained that despite obvious proof, no action has been taken in the majority of incidents reported to police officials.

 

The Senator wants the CEOs of several banks, the Governor of the Central Bank of Kenya (CBK), and the Head of the Banking Fraud Investigative Department to detail measures to curtail such actions.

 

"Outline the actions taken, if any, by banks when comparable claims have previously been presented, to ensure clients who may have lost money as a result of such fraudulent operations are compensated," Mutinda said.

 

In recent years, the country has become a hotbed of questionable bank transactions, pointing to poor anti-money laundering rules and failures.

 

A increasing number of Kenyan commercial banks are facing legal action for allegedly aiding fraud and credit scams, highlighting the lenders' shortcomings in undertaking due diligence when opening customers' bank accounts and monitoring financial activities.

 

Some banks have been involved in fraud scams in which impostors received money instead of the actual and intended receivers after opening parallel accounts.

 

The bank is accused of collaborating with the fraudsters in order to ease the opening, operation, and withdrawal of funds from bank accounts.

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