New bank deposits guidelines you should know

New bank deposits guidelines you should know

Customers in Kenya will no longer be required to disclose the source, use, and beneficiaries of large cash transactions over $10,000 (Sh1.5 million) following a ruling by National Assembly Speaker Moses Wetang’ula.

The ruling declared the rules, which were introduced by the Central Bank of Kenya (CBK) in 2016, illegal because they were not approved by Parliament.

Moneyed individuals and businesses have long protested the onerous checks, arguing they have hindered their ability to carry out smooth transactions.

This prompted President William Ruto and his predecessor, Uhuru Kenyatta, to push for the relaxation of the rules amid fears of money laundering and terrorism financing.

In recent years, commercial banks have been following the rules aggressively after at least five of them were hit with heavy fines by regulators for being used to transact proceeds of crime in government-related procurement deals.

The additional guidelines, which have now been struck out, required individuals depositing at least $10,000 to disclose the source of the cash and justify why such a transaction could not be made through electronic means.

Customers were also required to disclose where the money being withdrawn was going, what it would be spent on, and who the direct and indirect beneficiaries were.

The ruling on a technicality now raises questions about how far autonomous institutions can go in issuing directives via circulars without

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