Fraudsters, Rogue Bank Staff Target Retirees’ Pensions in New Scam

‍In Summary:

• Most banks have been slow to cut lending rates in line with CBK's benchmark rate reduction, despite regulatory pressure.

• Fraudsters, aided by rogue bank staff, are scamming retirees by spoofing bank customer care numbers and tricking them into transferring pension benefits via USSD. 
• The Teachers Service Commission (TSC) faces scrutiny over politically influenced teacher recruitment, with reports of appointment letters being distributed at State House and sold for Ksh200,000–Ksh300,000. 
• MPs will receive an additional Ksh366,011 monthly mileage allowance starting April 1,
• The National Treasury raised Ksh71.4 billion in its latest bond auction, exceeding its Ksh70 billion target

• KPC plans to auction petroleum stocks from 11 oil marketers to recover Ksh2.15 billion in unpaid debt.
• Kenya insists it did not discuss debt restructuring with China during a meeting focused on trade and investment
• Industrial firms saved Ksh688 million by using off-peak electricity, but the savings dropped compared to 2023.

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Only five out of Kenya’s 38 banks had lowered their lending rates to match the Central Bank of Kenya’s (CBK) benchmark rate cuts by the end of February, despite threats of daily fines, as reported by The Business Daily. The CBK had reduced the rate four times between August and February, bringing it down from 13 percent to 10.75 percent, but most banks were slow to adjust, citing the high cost of deposits. While a few lenders, including Citibank, Absa, and Standard Chartered, reduced their rates in line with the CBK’s cuts, others either made smaller reductions or even increased rates. The CBK is now pushing for compliance to ensure borrowing costs reflect the policy changes, with major banks like Equity, KCB, and Co-op announcing some reductions. However, the impact is yet to be fully felt, as banks continue to benefit from high interest rates, leading to record profits and shareholder payouts.

In a report by The People Daily, fraudsters are working with rogue bank staff to steal retirees’ pension benefits by spoofing bank customer care numbers and tricking victims into transferring their money. The scammers, tipped off by insiders, call retirees pretending to be from their bank, using urgent language to create panic. They convince victims to transfer money via USSD, draining accounts in small batches. The Banking Fraud Unit warns that similar scams target people receiving large payments. Banks advise customers never to share PINs or activation codes, while police urge vigilance when handling cash withdrawals. Authorities are arresting suspects, but the full extent of internal bank fraud remains unclear.

In a report by The Standard, the Salaries and Remuneration Commission (SRC) has approved an additional Ksh366,011 monthly mileage allowance for MPs, further increasing the financial burden on taxpayers. The new allowance is effective April 1.Meanwhile, Kenyans earn a minimum wage of Ksh15,201.65.Treasury CS John Mbadi has warned that Kenya’s wage bill, exceeding Ksh1 trillion annually, is unsustainable

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The Kenya Union of Post Primary Education Teachers (KUPPET) has raised concerns over the alleged lack of merit in teacher recruitment. According to The People Daily, recruitment is reportedly being influenced by State House, with MPs and governors allegedly receiving Teachers Service Commission (TSC) appointment letters to distribute among their supporters. Some politicians are even said to be selling these letters for Ksh200,000 to Ksh300,000. Those recruited through political connections reportedly secure permanent jobs immediately, while others remain on contract earning Ksh25,000 per month. The TSC is now under scrutiny over these claims, which raise serious concerns about transparency and integrity in the hiring process.

Kenya Pipeline Company (KPC) is set to auction petroleum stocks belonging to 11 oil marketing companies (OMCs) to recover a Ksh2.15 billion debt that has remained unpaid for over six months. The state-owned firm has appointed 11 lawyers to facilitate the sale after previous efforts, including payment reminders and service suspensions, failed. The debt is part of a larger Ksh10.07 billion outstanding credit as of June 2024, which includes Ksh5.54 billion linked to Kenol-Kobil, now Rubis Energie, whose dispute has been settled. KPC, which recorded a 52.6 percent rise in net profit to Ksh6.87 billion in the year ending June 2024, says the affected OMCs are not actively trading but cannot disclose their names due to contractual obligations, as reported by The Business Daily

Kenya’s Finance Ministry has denied reports that it discussed debt restructuring with China after removing a reference to the topic from a social media post about a meeting between Finance Minister John Mbadi and his Chinese counterpart Lan Foan in Beijing. According to Citizen TV, the talks focused on strengthening trade, infrastructure investment, and financial collaboration, but officials clarified that debt restructuring was not part of the discussions. Kenya, which has heavily borrowed from China for infrastructure projects, continues to seek funding for developments like the Standard Gauge Railway extension. President William Ruto has maintained that Kenya will not default on its debt and has been exploring alternative financing options, including a recent Ksh202.5 billion deal with the United Arab Emirates.

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A total of 2,452 industrial firms saved Ksh688 million in electricity bills between July and December 2024 by capitalising on Kenya Power’s Time of Use (ToU) tariff, which offers a 50 percent discount for operating during off-peak hours. However, this was a 22.7 percent drop from the Ksh890 million saved during the same period in 2023, as electricity consumption under the tariff fell by 21 percent. According to The Business Daily, the highest savings were recorded in July at Ksh149.7 million, while December saw firms save Ksh134.6 million due to three public holidays and five weekends. The decline in savings was not explained in the Energy and Petroleum Regulatory Authority (Epra) report, but factors such as stabilising inflation and currency fluctuations may have played a role.

The National Treasury has raised Ksh71.4 billion in its latest Treasury Bonds auction, surpassing the Ksh70 billion target with a performance rate of 102.47%. The funds will primarily go toward redeeming Ksh90.85 billion in maturing obligations, with the remainder allocated for new borrowing as reported by The People Daily. 

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