The Central Bank of Kenya has warned against dealing with entities and persons providing money or value transfer services without a license or authorization from CBK.
This follows reports that there are entities and persons providing money or value transfer without a license.
- Money or value transfer services include payment services regulated under the national payment systema act 2011 and money remittance services regulated under money remittances regulations, 2013.
- CBK said the caution is directed to members of public against seeking money or value transfer services such as ‘hawala’ from unlicensed providers.
“It is criminal offence to provide money or value transfer services without a license or authorization from the Central Bank of Kenya. Such services do not enjoy the protection of the law and consumers stand to lose in case of any default by the providers of these services,” said CBK in a notice from supervision department.
“Licensed entities operate as payment service providers or money remittance providers and they conspicuously display the CBK licence authorization in their business premises, for ease of public reference,” the statement said.
- CBK’s oversight is meant to prevent market abuse by ensuring anti-trust tendencies are minimized, protect payment systems from criminal abuse such as money laundering and fraud, and facilitate risk reduction measures.
The Large Value Payment System is characterised by Real Time Gross Settlement (RTGS) mechanism where payment instructions from customers to beneficiaries in commercial banks are settled instantaneously.
Retail Payment systems however process mainly consumer payments of large volume but relatively low value through infrastructure such as cheques, credit transfers, direct debits, ATM, mobile money transfers and EFTs (Electronic Funds Transfers).
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