Controversial businessman Paul Kobia has sued Barclays and Central Bank of Kenya for allegedly threatening to close his bank accounts if he fails to disclose his source of huge chunks of money.
Kobia wants the court to issue declarations against CBK’s regulations which require full disclosure and proof of the basis and the source of funds by customers prior to crediting the customers’ accounts.
He claims that the move by CBK is an infringement to the customers constitutional right to privacy and property thus want court to declare it null and void.
The businessman wants the court to also allow him to access his funds and to prevent CBK from closing his bank accounts.
He is also requesting the court to direct CBK not to impose rules that make cash withdrawals by customers of banks difficult and which breach confidentiality of financial transactions of customers unless there is an unresolved complaint lodged by any statutory agency or breach of the statutory provisions.
Article 231(1) of the constitution gives CBK the authority to formulate monetary policy and perform other functions conferred upon it by the Central Back Act and Banking Act, however, the authority must be exercised in accordance with the law.
“My constitutional rights to privacy and property will and is likely to be infringed unless the prayers sought is granted. I and many other customers are likely to suffer great loss if bank accounts are closed and they are restricted from accessing the funds,” says Kobia in an affidavit.
He further argues that the said rules will adversely affect foreign remittances which will in turn slow down the economic growth of the country.
Kobia laments that most customers of various bank accounts will lose funds that are intended to be remitted to their accounts if the court doesn’t intervene.
“The banking institutions customers who do not have documentary proof of the source of funds may lose their money. The regulations delay crediting of various customers’ accounts thus adversely affecting their economic and financial situation,” claims Kobia.
“By a letter dated December 14, 2018, my bank, Barclays Kenya threatened to close my account because of CBK’s unreasonable regulations.”
In a letter to Kobia, Barclays Bank wrote informing him that they have made a decision to stop providing him with banking services and they would close his bank accounts and that after closure, no further standing orders will be paid nor cheques or direct debits presented for payment will be returned to the remitter.