CBK probes claims of coins deposit fee

By Morris Aron

Central Bank has launched investigations into claims that some commercial banks are levying fees to clients who deposit currency in certain coins.

The regulator has moved to establish whether financial institutions are charging 20 per cent of the value of Sh1 and 50-cent coins as fees for ‘handling bulky coins’.

A senior official at CBK who sought anonymity, said the regulator had instructed the relevant investigation departments to find out which banks had issued such directives and establish possible breach of a CBK order last week.

"We still stand by our directive that the Sh1 and 50-cents coins are legal tender and no financial institutions should charge a customer for depositing coins with them," said the official who deals with currency and circulation.

"Any bank contravening this directive will be reprimanded for defying the order."

Loose change

Reports have emerged from Nyamira in Western and Kiambu—that customers were asked to pay a 20 per cent fee when depositing coin worth Sh1 or below. The development follows rumors that the CBK had withdrawn Sh1 and 50-cents coins from circulation leading to a shortage. The shortage had seen shopping outlets resort to urging customers to pick sweets from cash counters instead of loose change.

The claims saw CBK move to allay fears that some currency coins were no longer legal tender saying that the shortage had been caused by a general trend where majority of the public prefer to leave coins in their cars or at home when going shopping.

CBK maintained that all series of Kenya currency coins are still valid and should be accepted—without any conditions or charges—by retailers and banks.

‘‘The Bank has not withdrawn or demonetised any of these coins (5 cents, 10 cents, 25 cents, 50 cents, Sh1, Sh5, Sh10, Sh20, and Sh40) and as such, they remain valid and are Legal Tender in Kenya as per provisions of the aforementioned Act,’’ said CBK Governor Prof Njuguna Ndung’u.

appropriate action

Prof Ndung’u also said coins including the one, two, five, 10, 20 and 40 shillings remain valid.

Kenya Commercial Bank—which is one of the banks alleged to have issued a directive that coin deposits should be charged —had not got back to The Standard by the time of going to press.

"We will be soon announcing appropriate action taken against banks that will have been found charging customers for depositing coins with them," said the source.