Central Bank of Kenya has expressed concern over sudden spike in purchase of wheat using old cash with a few days left to the September 30 deadline for phasing out old KSh 1000 notes.
The regular indicated the rate at which farmers in Narok county were buying wheat using the old notes was a bit alarming even as it emphasized deadline for exchanging the old KSh notes will not be extended.
In a statement issued on Tuesday, September 24, the CBK boss Patrick Njoroge clarified there would be no penalty for keeping the old money, but warned those who would not have exchanged their old cash after September 2019 would be left with worthless currency.
“There is no penalty for holding the older KSh 1000 notes after September 30, but you will have lost the value of your money,” Njoroge said.
Njoroge had earlier urged financial institutions to be extra vigilant and watch out for any abnormal transactions as deadline for withrawal of the old KSh 1000 notes approaches.
He issued a stern warning to the lenders against any attempt to circumvent the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) requirements.
“In the regard, the banks are advised to remain vigilant and undertake enhanced due diligence measures on customers transactions and ensure effective monitoring of all accounts and transactions,” he said In a letter dispatched to the banks on September 13, 2019.
The regulator further warned action will be taken against any financial institution found flaunting the rules and guidelines as stipulated under POCAMLA.
“The CBK shall take appropriate enforcement action against any commercial bank that fails, neglects or omits to comply with relevant AML/CFT laws and regulations,” the letter read.
The Central Bank had in a separate statement advised employers who pay salaries and wages in cash to start paying their employees using the new KSh 1,000 notes.
The workers, it noted, will not be able to use the old KSh 1,000 cash past the deadline for withdrawal of the old currency from circulation.
The old KSh 1000 notes will be phased out and replaced with the new generation currency which was unveiled on June 1, 2019.
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