The Central Bank of Kenya (CBK) has taken regulatory action against Ecobank Kenya Limited (Ecobank) for unsafe trading practices and breaches of the Prudential Guidelines on Foreign Exchange Exposure Limits in March 2022.
In investigating Ecobank’s trading practices and a specific transaction that it had concluded, it is evident that Ecobank did not have sufficiently robust risk controls to prevent breaches of its foreign exchange exposure limits, or the inaccurate reporting of its position.
Against this backdrop, Ecobank is required to undertake the following:
By Thursday, March 31, 2022, put in place a remedial plan to ensure the operational lapses that led to the non-compliance are addressed. The remedial plan should also point to specific measures to address the unsafe trading practices that led to the non-compliance and to enforce adherence to orderly conduct as stipulated in CBK’s Guidelines on Foreign Exchange.
Reverse the amount of additional exposure that was created as a result of the regulatory
Cease to transact as an authorized foreign exchange dealer in the Kenyan market from Tuesday, March 29, 2022, to Monday, April 4, 2022. During this time Ecobank cannot transact, inter alia, in the interbank foreign exchange market. However, all committed transactions as of March 28, 2022, can be
“Ecobank’s acknowledgment of its obligations as an authorized foreign exchange dealer and its commitment to address the underlying issues is noted.
CBK reiterates the objective of building sound, fair and transparent financial markets, anchored in the law and according to global best practices,” said CBK.