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Family Bank wants wider probe into NYS cash trail

Wednesday November 16 2016

Family Bank chairman Wilfred Kiboro (left) and Managing Director David Thuku during a media briefing on the financial soundness of  the bank in Nairobi on November 15, 2016. PHOTO | SALATON NJAU

Family Bank chairman Wilfred Kiboro (left) and Managing Director David Thuku during a media briefing on the financial soundness of the bank in Nairobi on November 15, 2016. PHOTO | SALATON NJAU 

By CHARLES MWANIKI

Family Bank has called for broader investigations into all the banks that handled money paid to National Youth Service (NYS) contractors since 2013.

Mr Wilfred Kiboro, who chairs the bank’s board, Tuesday said that Family Bank has so far co-operated fully with all the agencies investigating the loss of Sh791 million from the NYS — including the PAC— and has taken steps to terminate the services of all its staff that were adversely linked to the theft of public funds.

The National Assembly’s Public Accounts Committee (PAC) Tuesday heard that 17 more banks handled billions of shillings paid to the NYS suppliers, in addition to the 10 earlier revealed to have done so.

“If indeed there were other banks involved in the money issues at the NYS, we hope that the investigations will also cover them fully like they have done with Family Bank, so that we can get to the bottom of this issue and know what the truth is. The NYS issue is very serious,” said Mr Kiboro at a Press briefing on Tuesday.

Investigations into the additional lenders who handled the cash could yet reveal more losses at NYS, although PAC says it is too early to determine whether there was impropriety on their part.

The mid-sized bank also sought to reassure its customers that there has been no massive cash withdrawals by its customers following some social media posts asking clients to withdraw their money.

“We urge our customers to ignore recent negative statements and malicious rumours on social media trying to depict Family Bank negatively in light of the ongoing NYS investigation and calling into question our stability and liquidity position. The investigations have no bearing on the financial stability of the bank whatsoever,” said Mr Kiboro.

“We are in a strong financial position and well within the statutory requirements as governed by Central Bank of Kenya.’’

Family Bank is the 13th largest in Kenya with a market share of 2.36 per cent as per the latest central bank sector statistics (December 2015). The lender has the fourth-largest branch network in the country.