CBK ON NEW NOTES

Why it will be tough to get new notes in bulk

Persons without bank accounts exchanging notes over Sh1M requires CBK endorsement. Why it won't be easy to exchange Sh1,000 notes in bulk

In Summary

• The deadline for Sh1, 000 old generation notes had been set to be October 1 by CBK, when they will be invalidated.

• New generation currency notes were launched by CBK governor Patrick Njoroge on June 1 in Narok stadium during Madaraka day celebrations.

CBK governor Patrick Njoroge./
CBK governor Patrick Njoroge./
Image: COURTESY

Central Bank of Kenya has issued a reminder to banks on how to handle deposits above Sh1 million as the country prepares to stop use of old notes on October 1.

In a statement on Tuesday, CBK warned bank bosses against abetting money laundering and urged the institutions to exercise caution when receiving deposits.

Here is a list of the requirements for depositing sums above Sh1 million according to the the Anti-Money Laundering (AML) act of 2009 and regulations 12 and 31 of the Proceeds of Crime and crime of AML of 2013.

• Customers exchanging currency notes for amounts ranging from Sh1 million to Sh5 million of the withdrawn currency notes will exchange at their respective commercial banks under the normal Anti-Monitory Laundering procedures and requirements.

• Persons without bank accounts exchanging currency notes for amounts exceeding Sh1 million will require an endorsement from the CBK.

• Persons exchanging currency notes for amounts exceeding Sh5 million will be required to have an endorsement from Central Bank.

• In order to closely monitor the process, CBK has directed financial institutions to submit their weekly reportS, which should reach them by 9am of the first working day of the following week.

• CBK has also said it will take endorsement actions against any commercial bank which might fail, neglect or omit to comply with AML laws, including the submissions of returns on time.

• Banks are to establish the identity of the persons transacting and whether they are doing so for themselves or others.

• Banks are to establish the source of funds and where they are going to.

New generation currency notes were launched by CBK governor Patrick Njoroge on June 1 in Narok stadium during Madaraka day celebrations.