Letter from Standard Chartered Bank to Co-operatives and other Financial Institutions

These are words of a letter written by SCB to co-operatives and other financial institutions titled “Closure of Financial Institutions’ Accounts.”

“Standard Chartered Bank Group (“SCB”) has, as part of a comprehensive strategic review of its business and client segments in multiple countries, taken a strategic decision to discontinue banking relationships with certain client categories managed within its Commercial and Business Clients segments formerly SME Segment. One of the affected client categories is Financial Institutions (FI), within which you are classified as one.

The decision to cease banking the affected client categories in Commercial and Business Clients, including FI, has resulted from increased burden of complying with regulatory requirements for banking such clients. Key regulators under whose supervision SCB falls requires higher levels of client due diligence to be conducted on such clients, both at the time of commencing the banking relationship and on an ongoing basis. Satisfying the regulatory requirements for such clients imposes a significant cost and compliance burden on SCB.

In line with the above, we regret to inform you of our intention to close your account(s) with us effective 15th December, 2014. This notice is to enable you make alternative arrangements for your banking needs and minimize any disruption to your business.

We wish to state that this initiative has nothing to do with the standing or conduct of your operations. Upon closure, a bank draft for the balance in your account (if any) will be issued. Please pick up the draft at the branch where your account is domiciled. Cheques on the account(s) will not be honoured after the account closure. Do not hesitate to contact the undersigned for any assistance. “

We all remember when some banks locked out civil servants and teachers some years back through raising minimum account balance to 10 or 20k? Now those/that bank(s) are hawking loans in the streets and offices. Same story here. In this country people save and invest through co-operatives. By locking out these people, this bank is telling us Kenyans it does not need us. But thank God, we have banks that are still eager to serve everybody including co-operatives because they know wanjikus run this country however small their savings in co-operatives are!! Many of us will not have gone to schools/collages were it not for co-operatives which paid our school fees (school fees loans), they also provided homes we live in (development/normal loans) and paid medical bills whenever we were sick courtesy of emergency loans or even buried our dead through Benevolent Funds.

Banks should be investing in this sector instead of citing regulations and cost of complying with those regulations…it will be interesting to find out how much SCB spent on co-operatives in trying to satisfy the regulators given they posted 14% rise in 9-month pretax profit which is Kes 11.2B ($124.51 million).

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3 Responses

  1. it is quite interesting that in the list of Co-operative Organizations shown in this page Kuscco Ltd is not listed as one of them. Any explanation for that Mr. Admin??

    • Hi Salva,

      KUSCCO is a union. I am sure I have mentioned it several times. Check under “National Co-operative Organizations” in one of my posts here. Cheers.

  2. Reblogged this on Kenya Co-operative Movement.

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