Close

NEW GENERATION NOTES

New currency: CBK fires warning to bank bosses

Banks are also to establish the source and the purpose of the funds.

In Summary

• Individuals without bank accounts exchanging new currency more than Sh  1 million are required to have an endorsement from CBK.

• All financial institutions have been cautioned against failing to comply or neglect AML laws.

The new look Kenyan currency notes.
The new look Kenyan currency notes.
Image: ENOS TECHE

The Central   Bank of Kenya has told CEOs of commercial banks to ensure strict rules are followed when accepting old Sh1,000 notes to avoid money laundering. 

Through its statement on Tuesday circulated to all banks, CBK said financial  institutions are expected to adhere to the Anti-Money Laundering (AML) act of 2009 and regulations 12 and 31 of the Proceeds of Crime and crime of AML of 2013.

The act requires the financial institutions to establish the true identity of a person transacting the money.

It also states that the financial institution should obtain the necessary identifications documents of the person involved in the transaction.

They are also to establish the source and the purpose of the funds.

Financial institutions are also required under the act to maintain records of all transactions carried out by their clients.

The statement has also stated that persons exchanging currency notes not more than Sh. 1 million of the withdrawn currency notes will exchange at their commercial banks, CBK branches or the nearest banks.

CBK has said customers exchanging currency notes ranging from Sh. 1 million to Sh. 5 million of the withdrawn currency will be required to exchange at their commercial banks under the normal procedures and requirements.

Individuals without bank accounts exchanging new currency more than Sh  1 million are required to have an endorsement from CBK.

 

Persons who want to exchange the new currency notes more than Sh5 million are also required to have an endorsement from the CBK.

All financial institutions have been cautioned against failing to comply or neglected AML laws.

CBK had announced to the public that the old Sh 1,000 notes will be invalid by October 1.

The new currency notes were launched by the CBK governor Patrick Njoroge during the Madaraka celebrations in Narok county.

The new currency notes have however been opposed by some individuals for flouting the Constitution with the “image” of founding President Jomo Kenyatta.

The Constitution bars CBK from using portraits of people in national currencies.