Gov’t To Review Bank Policy Requiring Individuals To Declare Source of Cash Transactions Exceeding Sh1 Million

NAIROBI, Kenya, Sept, 14 – The Central Bank of Kenya is expected to come up with a new framework on financial guidelines involving transactions exceeding Sh1 million.

President William Ruto in his inauguration speech said that during his engagements while on the campaign trail, traders complained about the onerous burden involved in cash transactions exceeding Sh1 million.

“Many have reverted to storing money under their mattresses at great risk, which is clearly not the intention of the anti-money laundering regulations,” he said.

Ruto said that even though his government remains committed to mitigating the risk around the issue, there is scope to make compliance less burdensome on genuine business transactions.

“I have been assured by the Central Bank that work on how to ease this burden without compromising the security of the financial system is underway,”

Outgoing president Uhuru Kenyatta had also sought a review of the same issue saying that it had affected the growth of micro- and small-sized businesses which largely transact in cash.

The cap is as described in regulation 31 of the Proceeds of Crime and Anti-Money Laundering Regulations 2013.

Cash remains an important payment channel for MSMEs, representing 80 percent of all their financial transactions.

Kenyatta last teat said that the implementation of cash transactions requirements by banks has not been facilitative of the operations of MSMEs and has to some extent inhibited their growth.

Financial institutions are required to keep records of cash transactions of more than Sh1 million and report suspicious deals to the Financial Reporting Centre (FRC).

Meanwhile, Ruto said that Financial inclusion and access to credit are critical in addressing the fundamental factors of the cost of living, job creation, and people’s well-being. We shall take measures to drive down the cost of credit.

“Our starting point is to shift the Credit Reference Bureau (CRB) framework from its current practice of arbitrary, punitive, and all or nothing blacklisting of borrowers, which denies borrowers credit. We will work with credit reference bureaus a new system of credit score rating that provides borrowers with an opportunity to manage on their creditworthiness. This will eliminate blacklisting,”