Bankers are urging the public to replace their Sh1,000 old generation notes now and not wait until the last minute.
“Members of the public are encouraged to use this period to exchange their old notes for the new currency,” Kenya Bankers Association said in a statement.
The association said its members should be cautious during transactions to stop any attempts to launder illicit funds through the banking system.
Eighty three per cent constituting of 1000 notes, of the Sh540 billion in circulation is expected to be withdrawn by October 1. Sh500 notes account for 5.9 per cent, Sh200 (4.2 percent), Sh100 (4.8 per cent) and Sh50 (1.9 per cent).
According to KBA, there are approximately 1,700 ATM machines, 780 branches, 66 thousand bank agents countrywide.
The move is expected to counter illicit financial flows and money laundering, especially with the older one thousand shillings series.
Banks already anticipate pullbacks from unbanked Kenyans.
"Under these legal requirements, banks have and continue to undertake their due diligence processes seriously and report suspicious transactions to the Financial Reporting Center as required.
Therefore, during this period, customers are requested to cooperate with the industry regulatory requirements, particularly for cash deposits in excess of Sh1 million," KBA added.
Meanwhile, banks are in a process of reconfiguring the machines and currency counters in order to recognise the new currency.
The release of the new 50, 100, 200, 500 and 1,000 Shilling notes is the second phase of the country’s transition to the new currency, after the issuance of 1, 5, 10 and 20 Shilling coins in December 2018.
“We anticipate banks will have a structured replacement program that will ensure minimal disruption of regular services,” said in a statement.
The announcement follows an unclear speculative stand with the reported impact of demonetisation effect in India 2016.
BBC reported banks running out of cash and long queues of customers hoping to change their savings for legal tender.
Many low-income Indians, traders and ordinary savers who relied on the cash economy were badly hit.
