Equity Group CEO Dr James Mwangi says banks are not well positioned to execute a regulation by the Central Bank of Kenya which requires one to give full disclosure on cash transactions exceeding Ksh 1 Million. He says banks may not have the investigative capacity to confirm procurement and payments by organisations in following due process.
In an interview with Citizen Tv, Mr Mwangi noted that CBK regulation that requires customers to provide additional information about huge cash transfers is not the ideal way to enable people do their businesses well.
“The investigative approach being imposed on banks, the need for giving documents for any transfer that comes to the bank…I don’t think the banks are well positioned to execute this…I do not think that is the right way to enable people to do business,” he said.
According to the CBK guidelines issued in 2016, all customers performing transactions exceeding Sh 1.0 Million are required to fill in a special form stating where the money is from or is going, who they are paying or receiving the money from and for what purpose.
According to CBK, the new policy would control large cash transactions which are prone to be used for illegitimate businesses like money laundering and terrorism financing.
“While most cash transactions are carried out in legitimate business, large cash transactions which are characterised by informality and anonymity make bank transactions vulnerable to money laundering and