A recent scandal involving a Ksh1.5 billion M-Pesa scam has led to the dismissal of 200 employees at Equity Bank in Kenya, which is one of the biggest cleanups in the Bank’s history.
Sources at the Bank revealed to the PublicistEA that the massive dismissals stemmed from investigations launched in December 2024 that spanned several months.
Following the said investigations, the Bank employees were tasked to account for irregular income into their bank or M-Pesa accounts for the past two years, which led to face-to-face disciplinary hearings being held for those with unexplained or suspicious deposits.
The investigation was instituted after Management of the Bank discovered that the affected employees had used stolen IT credentials belonging to a manager in the Group Processing Centre to pull off the heist, during which they executed over 40 unauthorised high-value transactions that resulted into the siphoning of over Ksh1.5 billion from Equity Bank to accounts in other banks.
Speaking about the cleanup, James Mwangi, the Equity Group Chief Executive Officer (CEO), said that the sacking was not a redundancy plan but a necessary cleanup to uphold the bank’s currency of trust.
“We have pushed the brand. It is now Africa’s top-rated financial brand and second globally. It will never survive if its people contradict it,” Mwangi said.
He revealed that following the investigation, staff received termination letters citing gross misconduct, conflict of interest, and ethical breaches and many of them were sent off with their salaries paid.
However, while this incident directly affects Equity Bank, it also has implications for Kenya’s banking industry as a whole.
Impact on Equity Bank’s Reputation
The scandal is likely to impact Equity Bank’s reputation, both locally and internationally. The bank’s CEO, Mwangi, has emphasised the importance of maintaining trust and upholding the bank’s brand. This is because the incident highlights the need for robust internal controls and risk management systems to prevent similar scandals in the future.
It is important to note that the scandal comes at a time when Equity Bank Kenya posted a net profit of Ksh24.1 billion for the year ending December 2024, and ranked the third best performing company in East Africa according to the 2025 African Business ranking, with 1,296 market value.
Strengthening Internal Controls
In response to the scandal, Equity Bank is strengthening its internal controls, hiring more security and risk professionals, and sourcing senior staff with anti-fraud expertise.
We have since established that the bank is also beefing up compliance efforts at its subsidiaries in Uganda, Rwanda, Tanzania, South Sudan, and the Democratic Republic of Congo.
Industry-Wide Implications
The scandal also has implications for the banking industry as a whole. It highlights the need for banks to prioritise risk management and internal controls, and to ensure that employees are held accountable for their actions.
Regulatory bodies may also need to review their oversight mechanisms to prevent similar incidents in the future.
The Ksh1.5 billion M-Pesa scam at Equity Bank is, therefore, a significant incident that highlights the importance of robust internal controls and risk management systems in the banking industry.
While the incident directly affects Equity Bank, it also has implications for other banks in the Kenyan banking space.
By prioritising risk management and internal controls, only then can banks help prevent similar scandals and maintain the trust of their customers.