Mwangi: Banks not well placed to enforce CBK law on cash transaction

 

Equity Bank Group Chief Executive Officer James Mwangi

NAIROBI, KENYA: Equity Bank Group CEO James Mwangi has said that banks are not well positioned to implement the regulation by the Central Bank of Kenya which mandates full disclosure on transactions over Sh1 million.

 “The investigative approach being imposed on banks, the need for giving documents for any transfer that comes to the bank…I don’t think the banks are well positioned to execute this…I don’t think that is the right way to enable people to do business,” Dr. Mwangi said in an interview with Citizen TV last week.

On Monday, Kenya Bankers Association (KBA) in its reply to a case by Wajibika Society challenging section 65 of the Finance Act, 2018 claimed the section was sneaked into the Bill and passed at the third reading without having gone through a public hearing.

KBA explained that the failure by Parliament to give an ear to the lenders and banking industry players before enacting the law was unfair and resulted in an unconstitutional amendment.

Last month while appearing before a parliamentary committee, CBK Governor Patrick Njoroge defended the regulation saying, “Most Kenyans willingly report on any transactions as per the regulation,”

Dr. Njoroge told the Parliamentary Committee on Finance and National Planning that 99.3 percent of bank accounts in Kenya have deposits of less than Sh1 million. “Only 0.7 percent of accounts have deposits of more than Sh1 million,”

Dr. Njoroge also said the regulation was in line with global requirements to counter money laundering and terrorism financing.

“The requirement to report any transactions above Sh1 million or equivalent are contained in the requirements and provisions of the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA), which was effected in 2010,” he said.