Over the weekend, President Uhuru Kenyatta through the governor of Central bank of Kenya Patrick Njoroge announced that the government is going to get rid of the old one thousand shilling notes and introduce new currencies ahead of August 1st deadline.
The directive requires everyone in possession of the old currency to surrender all the money to the central bank in exchange for the new currencies.
This means that all those who will miss exchanging to the new currencies by the first of August will not be allowed to use the old currencies anywhere as the same will have been rendered valueless.
In a move aimed at setting a trap for corrupt individuals, Mr. Njoroge has warned all Local banks and forex bureaus to be on high alert to ensure that illicit money does not enter the financial system as the government rolls-out the new currency.
According to the governor, the old 100 shilling note has widely been used by the fraudsters who make fake money in the country. He added that hiding money in homes prevents the flow of money among Kenyans and in the process affecting businesses and the economy.
The governor also said individuals who want to exchange more than Sh5 million, and individuals without bank accounts will first be required to contact CBK for endorsement before proceeding to designated banks.
Governor @njorogep: We’ve allowed the time for the withdrawal of the banknotes because we need to take care of our people. We need to ensure Wanjiku has all the relevant information and has enough time for the changeover. pic.twitter.com/BWIOH66eIm
— Central Bank of Kenya (@CBKKenya) June 3, 2019
This means that all those individuals with huge amounts of money exceeding 5 million will first have to explain the source of their wealth before being allowed to store such amounts in banks.
3. People who want to exchange amounts above KES 5 million will need to contact the CBK. We have, however, analysed these and found that these are very few. pic.twitter.com/nSYbzq6Bdf
— Central Bank of Kenya (@CBKKenya) June 3, 2019
It will deal a major blow to all those politicians, business persons and suspicious cartels who keep huge amount of money under their mattresses or sacks as they will not be in a position to exchange the same without giving proper explanations.
“For between Sh1 million to Sh5 million, you will need to go to your bank where they know you and your type of business. They will still ask the usual questions and you will sign the usual declaration forms just like it has been done before,” said Dr Njoroge.
2. People who want to exchange amounts between KES 1m and KES 5m will need to go to their own banks. Those who do not have bank accounts and want to exchange this amount will need to contact the CBK. We will then endorse them and they can go to a designated bank branch. pic.twitter.com/7arDc7YAqi
— Central Bank of Kenya (@CBKKenya) June 3, 2019
The governor added that those people who own money less than 1 million but do not have any bank accounts will just go to any bank and exchange their currencies as long as they can prove that the money belongs to them.
The measures being put in place by the bank are part of strict procedures put in place by the government to deal with individuals engaged in illicit cash flows as the country intensifies its war on corruption.
4. India could have done better in communications, and we intend to communicate as widely and clearly as we can. pic.twitter.com/YpA1GJx8VO
— Central Bank of Kenya (@CBKKenya) June 3, 2019
President Kenyatta had earlier on promised to tighten the rope against corruption and many are in full support of this new directive as it will help get rid of the cartels who have siphoned the country dry.
The governor has already met with all the heads of commercial banks in the country and is also planning to brief the foreign exchange bureaus and money remittance providers about the new measures in order to seal all the loopholes that the money launderers might be planning to use.
Governor @njorogep: I have just spoken to CEOs of commercial banks, and I will also later today speak to forex bureaus and payment service providers. I shall also speak to the Governors of our sister central banks in the region. pic.twitter.com/hJDvbJsYzW
— Central Bank of Kenya (@CBKKenya) June 3, 2019
“I have just spoken to the CEOs and CFOs of commercial banks and micro-finance. I will talk with foreign exchange bureaus and money remittance providers to make sure all this is dealt with. We want to make sure that anti-money laundering and countering financing of terrorism framework is robust,” said Njoroge.
Most leaders especially Deputy president William Ruto’s allies have welcomed the move saying it will help reduce the cases of corruption already escalating in the country. The leaders want the August deadline to be reduced to one month time in order to prevent those planning to use mischievous means to acquire the new currency.
If this directive will succeed, it will be a major breakthrough for Uhuru Kenyatta in his war against corruption which was slowly turning to a chronic disease in Kenya.