Ecobank Banned From The Forex Market

Ecobank is unable to transact in the interbank foreign currency market during this time. However, as of March 28, 2022, all committed transactions can be settled.

The Central Bank of Kenya (CBK) announced the action on Monday, March 28, 2022, citing risky trading activities and violations of the Prudential Guidelines on Foreign Exchange Exposure Limits.

"It is clear from our investigation of Ecobank's trading operations and a specific transaction that Ecobank lacked sufficiently effective risk controls to avoid violations of its foreign exchange exposure limitations or false reporting of its position," CBK said.

The lender has been ordered to put in place a remedial plan by Thursday, March 31, 2022, to rectify the operational shortcomings that contributed to the non-compliance. The remedial plan should also include specific actions to rectify the risky trading behaviors that contributed to the non-compliance, as well as to ensure adherence to the CBK's Foreign Exchange Guidelines.

Ecobank will also have to repay the amount of increased exposure it incurred as a result of the regulatory breach.

"Ecobank's recognition of its responsibilities as an approved foreign exchange dealer, as well as its willingness to rectify the underlying issues, is commended. The CBK reiterates its goal of creating sound, fair, and transparent financial markets that are grounded in law and follow worldwide best practices," CBK was also added.