Kenyan banks want to know where you are going after withdrawing $10,000

Bank customers will have to disclose the beneficiary of cash withdrawals above $10,000, the Central Bank of Kenya (CBK) has ordered in a circular dated January 5 and sent to chief executives of commercial banks, microfinance banks and mortgage finance companies.

The bank notes that large cash transactions which are characterized by informality and anonymity, make the banking sector vulnerable to money laundering and terrorism financing. Kenya has been attacked several times by terrorist group Al Shabaab which says it attacks the East African nation due to its military activities in Somalia. Such groups are believed to be easily funded with untraceable cash withdrawals.

“The CBK asks institutions to obtain the following additional information when handling large cash transactions: Why the large cash deposit or withdrawal is necessary? Why it cannot be done through electronic means? Where the money will be taken right from the bank premises? The full identity of the intended beneficiaries of the money? What the money is going to be used for?” the CBK circular read.

The CBK holds that where a customer is unable to provide the required information or the facts given by the customer fail to support the rationale behind the transaction, “the institution should immediately file a suspicious transaction report with the Financial Reporting Centre”.