The deadline is fast approaching, The Central Bank of Kenya (CBK) has left dirty money dealers sweating over what to do with their ill gotten cash, to inject it into the economy or watch on as their criminal enterprise crumble.
On Saturday, CBK announced plans to withdraw the Ksh 1,000 note by October and introduce the new generation notes into the economy.
Individuals without bank accounts holding on to Ksh5 million or more will also be required to visit CBK offices and explain the source of the money before their old notes are replaced with the new ones. The monetary policy regulator is using the new regulations as a method to rein in corruption, terrorism funding and money laundering.
In the past one year,the Directorate of Criminal Investigations (DCI) has busted a number of fake currency rings stashing billions of Kenyan Shillings in different residentials across the country.
Experts have repeatedly lamented that money is not circulating in the Kenyan economy with the most plausible explanation being that banks are no go zones for persons clutching on illicit cash due to tough anti-money laundering laws effected by the CBK which require individuals seeking to bank more than 1 million to fill forms stating the source of the funds.
CBK Governor Dr Patrick Njoroge has already indicated that the regulator is keeping tabs on the banking sector to ensure it flags all suspicious transactions between now and October.
The CBK boss also says that he is set to engage regional banking regulators with the sole intention of ensuring that their countries are not used as money laundering conduits.
This is unwelcome news for the dirty money cartels however petitions challenging CBK’s new rules filed by activist Okiya Omtatah and East African Legistlative Assembly (EALA) MP Simon Mbugua are likely to serve as temporary reprieve.
Speaking in its pre-budget analysis of the Kenyan economy on Monday, financial services consulting firm PKF indicated that in the event that the dirty money cartels introduce the ill gotten wealth in the system, the Kenyan economy might end up being inflated.
“If the money is released into the economy and ends up being more than the goods and services currently being produced in the country, then we might find ourselves in a situation where we are dealing with high inflation rates,” PKF partner Micheal Mburugu said during the event held at a Nairobi hotel.
But this will depend on whether persons handling illicit cash risk being on the radar of a hawk eyed CBK at a time when public opinion is on the regulator’s side.
A vast majority of Kenyan politicians have welcomed the demonitisation of the Kenyan economy saying it is the right method of dealing with corruption.
“Some people have been saying that Ndindi Nyoro has stashed a lot of money in sacks in his house. I want this period (before new bills are introduced) to be trimmed to two days so that people can know that Ndindi does not deal in dirty cash and the demonitisation will catch up with the real thieves eventually,” said the Kiharu MP during a political gathering on Sunday.