Tough days ahead for ‘Mattress Sacco’ as central banks of Kenya warns neighboring countries to be on the lookout for individuals who might want to launder Kenyan money.
Local banks and forex bureaus are also on high alert after the State set out to ensure that illicit money does not enter the financial system with the roll-out of the new currency.
The CBK says they are targeting around Sh218 billion in Sh1,000 denomination in a move move touted to mop up from circulation in the next four months.
CBK Governor Patrick Njoroge said individuals who want to exchange more than Sh5 million, and individuals without bank accounts, will first be required to contact CBK for endorsement before proceeding to designated banks.
“For between Sh1 million to Sh5 million, you will need to go to your bank where they know you and your type of business. They will still ask the usual questions and you will sign the usual declaration forms just like it has been done before,” said Dr Njoroge.
Those without bank account but have less than Sh1 million can walk into any bank and exchange the money provided they give their details and prove that the money belongs to them.
The measures are part of stringent procedures put in place to deal with individuals engaged in illicit cash flows as the country intensifies its war on corruption.
The CBK boss defended the planned withdrawal of the Sh1,000 note from circulation, saying the decision was informed by the Government’s desire to deal with money laundering and the proliferation of fake currency.
The CBK boss further dismissed critics of the new-look currency saying all laws were followed, including public participation. He said the Kenyatta International Conference Center was an iconic building
Other critics expressed fears that the country may go the India way, where a similar exercise was done in 2016 but appeared to have had limited success.
“We looked at the matter of demonetization in India and learned from it. There wasn’t enough cash in the bank branches at the time the announcement was made (in India). We are ensuring that there is enough cash in all the bank branches,” Njoroge said.
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