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More Than 60,000 Bank Agents On Watch-list

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Bank agents exceeding 60, 000 in number have been added to a watch-list as possible channels for cleaning illegal money.

The agents, who transacted a total of Sh1.07 trillion in 2017, could easily be of help to dealers handling illegal cash outside the formal banking system and in the ongoing process of the withdrawal of old notes.

When speaking on Wednesday, KBA chairman Habil Olaka said that bankers have put in place a system that will flag unusual transactions at the agencies such as frequent small deposits from the same person and large daily trades.

“Agents, for example, have limits and range of transactions and any strange upsurges will definitely be flagged and monitored. We just want to be extra vigilant to ensure that the system is not used to clean dirty money,” said Mr. Olaka.

“We already have the necessary framework to check the inflow of such money but we are now being extra careful to ensure they are enforced without any slip-ups and without inconveniencing those making genuine transactions.”

Agency banking is becoming an increasingly popular trend among the country’s commercial banks with the aim of providing their services to formerly under-served areas and lowering costs by minimizing the number of customers who visit their branches.

Data from the Central Bank of Kenya (CBK) accentuates its popularity as transactions conducted hit record high values at Sh1.07 trillion in 2017, rising from Sh734 billion in 2016 and Sh152 billion in 2012.

Similarly, the number of agents rose from 23,477 in 2013 to 61,290 in 2017.

Bankers warn that the ongoing withdrawal of the old 1,000 note may be an uphill task, considering the fact that it accounts for 83 percent of the total currency in circulation and 40 percent of the cash being used.

Some of the hitches the banking lobby has identified to be expected are software upgrades to accommodate the new notes, the acquisition of new cash counting machines and the reconfiguration of automated teller machines (ATMs).

CBK approvals will be needed before authorization is given to individuals seeking to exchange more than Sh5 million shillings. According to rules provided by the bank, a basic assessment will be carried out on the source and ownership of the money.

The CBK, however, says that the people who fall under this category are few.

Those who don’t possess bank accounts and are also seeking to exchange at least Sh1 million will also need the central bank to approve the transaction.

In the case of those with less than Sh1 million to exchange, official identification will be required in order to deal at their bank’s branches if they have accounts or at the CBK if they do not.

The governor said that while the volume of illegal flows has yet to be quantified, the authorities have obtained enough evidence to force them into action.

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