By John Njiraini
Security firms that transport money have been given the authority to deface notes in the event of an armed robbery.
The Central Bank of Kenya (CBK) has published regulations allowing security companies that offer cash-in-transit services to use modern technology to destroy notes, which will in turn cut costs for banks.
The regulations, however, only offer limited exemptions to sections of the 1966 law that criminalises the defacement or mutilations of currency notes.
According to regulations in a Legal Notice No 148 published on November 21 and printed on Tuesday last week, the CBK has allowed security firms to use the smoke-and-dye technology, in case of an armed ambush.
The smoke-and-dye technology is a container that emits coloured smoke when tampered with, in the process destroying the contents inside.
The container spills ink on stolen currency whenever a safe or briefcase or any other container is interfered with while on transit. The technology is widely used in Europe, Soth Africa and other parts of the world.
"What the CBK has done is to allow security firms to stain the notes using today’s technology in case of a robbery," said Kenya Bankers Association Executive Director John Wanyela.
The move is expected to ease the burden on commercial banks that have all along claimed they spend large sums of money to hire security to escort cash.
Technology
The costs shot to unbearable levels in January last year when the then Internal Security Minister John Michuki ordered banks to provide back up cars for policemen whenever money is being transported.
The directive came after a daring ambush of a cash-in-transit vehicle in Molo where gangsters killed three police officers and made away with more than Sh22 million.
According to the CBK regulations, security firms offering cash-in-transit services would have to apply for a licence to use or operate a cash defacement security device.A company that is granted the licence to use the device would, however, be required to take additional insurance cover to provide protection against defacement.
This would not be good news for banks as they would be forced to budget for extra insurance cover for the money being transported. Incase of an ambush and the cash is destroyed, it would be exchanged by the CBK for usable notes at its discretion.
An application for exchange of mutilated or defaced notes would have to be made to the CBK in writing, including the number and total value of the mutilated money, the cause of the mutilation and the denominations mutilated.
The regulations also ban the use of images of currency for publication or promotion or other purposes without CBK’s approval.
