In a move seen by most as an effort to prevent anyone from abusing the withdrawal process of old 1,000 Kenyan Shilling notes from circulation, the Central Bank of Kenya (CBK) has made it known that without a bank account, you will not be able to exchange more than 1 million Kenyan Shillings of old currency with the new notes.
The Central Bank of Kenya (CBK) has also directed commercial banks to first seek its approval before allowing such a transaction.
Speaking on the regulations which will guide the process, the Governor of the Central Bank of Kenya, stated that “Any person without a bank account who shall be in possession of currency notes of an amount exceeding 1 million Kenyan Shillings shall require the endorsement of the CBK before exchanging the notes,”.
One implication of this, is that individuals with such huge amounts, will be forced to open a bank account or lose their money, thus making it harder for those with ill-gotten cash to pick random people to help them clean their dirty money through the financial system.
Even with a new bank account however, if a new account holder all of a sudden credits his or her account with more than 1 million Kenyan Shillings, or seeks to exchange it in cash and without proper documentation on proof of source of funds, the new bank account will be reported for suspicious activity.
As a result of the regulations, all currency notes for an amount exceeding 5 million Kenyan Shillings, will not be exchanged as well without consent from the CBK.
This also applies to old account holders.
Only individuals (with bank accounts of course) and whose banking history checks out will be allowed to exchange 5 million Kenyan Shillings and below, without encountering any problems at the counters.
Anyone looking to exchange the old notes with new ones can also do so at the Central Bank of Kenya’s (CBK) head office on Nairobi’s Haile Selassie Avenue. Other CBK branches are in Mombasa, Kisumu, Eldoret, Meru, Nakuru and Nyeri.
Kenya announced that it will be withdrawing the old 1,000 Kenyan Shillings note and will be replacing it with a new note in an exercise expected to be completed by October 1.
Those who will not have exchanged their old 1,000 Kenyan Shillings notes by the said date, will end up with useless notes.
