The Central Bank of Kenya (CBK) has sent out new mandatory guidelines to banks to be on the look out for large volumes of cash being transacted over the counter. The notice targets customers who withdraw or deposit cash amounts of Kshs 1 million (~$10,000) or above.
It requires banks to get more information about why their customers are depositing or withdrawing these large sums of cash and query (among other things):
- Why can’t the cash deposit or withdrawal be made through electronic means?
- What is the money going to be used for?
- Who will be the direct and indirect beneficiaries of the money and provide the identity of the intended beneficiaries of the money.
The guidelines are drawn from existing crime and anti-money laundering regulations, and come after other attempts in the past to target money laundering, corruption, terrorism, or crime funds being transferred through mobile phones or remittances / hawala. But it seems, there’s been a realization, probably after investigations into the NYS saga, that cash was moved between banks in paper bags.
In Kenya, large sums (over Kshs 1 million) are meant to be transferred through electronic funds transfers (EFT) and real-time gross settlement (RTGS). Indeed cheques over Kshs 1 million are not accepted unless they are in support of amounts being transferred between accounts within the same bank.