Any withdrawal of Kshs 10 million and above will now require you to give a three-day notice and purpose of the transaction as well as source of funds
In a circular issued by the Kenya Bankers Association, over the counter cash transactions of large lumpsums will require customers to give a three-day written notice before being allowed to move money.
According to KBA Chief Executive Habil Olaka, the new guidelines are meant to support CBK’s circulars on money laundering to help step up efforts to curb graft through financial sector.
CBK already has clear guidelines and regulations on Anti-Money Laundering and Counter Financing of Terrorism issued by the Central Bank of Kenya on Proceeds of Crime and Anti-Money Laundering Act 2009, as well as guidelines on handling transactions above Kshs 1 million.
“There was a need to further strengthen controls across all member banks over and above the minimum,” explained Olaka.
Under the new rules, any cash transactions on a single day of between Kshs 1 million to Kshs 10 million will require approval of branch manager while that between Kshs million and Kshs 20 million will have to be approved by the regional branch manager or senior manager.
To transact over Kshs 20 million in cash on a single day, customers will require approval from head of branch banking or director for the transaction to be completed.
KBA is also going for a daily limit as opposed to per-transaction rules in what seems as a move to discourage money launderers
“In addition, for cash transactions above Kshs 10 million, the branch manager should request the customer to give a three-day written notice of the intention to transact,” said Mr Olaka in the circular.
Customers will also have to explain sources of their money, supported with evidence, before deposits are made. For withdrawal, they will have to explain reason for drawing out the money and why Real Time Gross Settlement (RTGS) cannot be used.
Customers will also have to give copies of their identity cards to banks as well as copies of IDs of all the people who will receive the huge amount of money being withdrawn.