CBK warns public over unlicensed online forex dealers

The Central Bank of Kenya has warned of unlicensed and unregulated online foreign exchange dealers and platforms.

CBK has asked the public to only deal with genuine and licensed financial institutions and entities.

According to a statement by CBK on Friday in the dailies, unregulated online dealers can be noticed through its aggressive marketing in social media and mass emails.

They purport to offer the best forex deals in the market and receive funds from customers in exchange for foreign or local currencies.

CBK also said unlicensed dealers have inadequate anti-money laundering and do not have requisite licenses from CBK or Capital Market Authority.

The public has been asked to confirm the licensing status of forex dealers from the CBK website before engaging with dealers.

Complains regarding unlicensed forex dealers can be forwarded to the CBK's Banking Fraud Investigations Unit.

CBK Governor Patrick Njoroge had earlier referred some digital players as shylocks, saying that it is true that some rogue entities are taking advantage of the digital wave to swindle consumers.

"I cannot comment on the use of the word shylock, however, we share in governor’s concerns about rogue players within the system. As an association, we advocate for consumer protection hence we cannot condone such vices," Njoroge said.

Digital lenders said they are open for an independent regulator to streamline the sector that has occasionally been accused of exploiting borrowers.