Kenya Bankers Association (KBA) has asked the banks, retailers, and citizens to be vigilant as there may be attempts to launder illicit funds through the banking system during the exercise of replacing the old generation notes with the newly released ones.
"We encourage banks, bank agents and retailers, as well as citizens in general, to be especially vigilant during this period as there may be attempts to launder illicit funds through the banking system during the exercise of replacing the old generation notes with the newly released ones," KBA said in a statement on Tuesday.
KBA noted that banks have put in the mechanisms to receive the old notes and provide their customers with the new currency notes
The process will include the reconfiguration of ATM machines and currency counters. There are approximately 1,700 ATM machines, 780 bank branches and 66 agents countrywide.
The association said that banks have and continue to undertake their due diligence processes seriously and report suspicious transactions to the Financial Reporting Center as required.
Kenyans have until October 1 to exchange the older Sh1000 notes for newer currencies, a move Central Bank of Kenya (CBK) says is aimed at curbing illicit finance.
"We have assessed the grave concern that our large bank notes, particularly the older Sh1, 000 series, are being used for illicit financial flaws in Kenya and also other countries in the region. To deal with those concerns, all the older Sh1,000 series shall be withdrawn by a Gazette Notice dated May 31, 2019, all persons have until October 1, 2019, to exchange those notes, after which the older Sh1,000 bank notes will cease to be legal tender," Njoroge said last Saturday.
People with Sh1 million to Sh5 million worth of the Sh1,000 notes will have to visit their banks and properly account for the source of their cash to be allowed to exchange or deposit.
Those with more than Sh5 million in cash will also be required to contact CBK.
According to CBK, the old Sh1,000 notes account for 83 per cent (Sh217 billion) of the Sh540 billion in circulation. The Sh500 notes account for 5.9 percent, Sh200 (4.2 per cent), Sh100 (4.8 per cent) and Sh50 (1.9 per cent).
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