Kenya’s new President William Ruto has announced that the Central Bank of Kenya is working with banks to allow customers to increase the amount they can transact beyond the KES 1 Million limit without having to report to the regulator.
While addressing Kenyans after he was sworn in as the fifth president of the country, President Ruto said that the current limit of KES 1 million is hindering businesses and driving people away from the formal financial system.
“Many have reverted to storing money under their mattresses, at great security risk. This is clearly not the intention of the anti-money laundering regulations. While we remain fully committed to mitigating this risk, we believe that there is scope to make compliance less burdensome on genuine business transactions.” Said Ruto.
Currently, the law requires that banks to report any of their customers cash transactions of more than KES 1 million to the Financial Reporting Centre (FRC) to enable the authorities to detect illicit financial flows such as money laundering.
Businesses and individuals transacting more than KES 1 million are required to declare to their bankers why the money cannot be deposited or withdrawn through electronic means under the Kenya Electronic Payments and Settlement System and Real-Time Gross Payment System (KEPSS/RTGS).
The disclosures include the source of the cash, how it will be spent, who are direct and indirect beneficiaries as well as the full identity of the intended beneficiaries.
Kenya is a signatory to the United Nations Security Council’s (UNSC) Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) frameworks, which require the reporting of any cash transactions of $10,000 or more.