MPs Imposed Laws Ignorant Of International Banking Regulations – CBK

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The push by Kenyan legislators to relax Anti-Money laundering laws will attract increased international scrutiny, heightened financial pressure or even see Kenya’s banking sector cut off from the global financial system.

Kenya Bankers Association has, therefore, come out to strongly oppose the Amendment to the Banking Act Section 33C, passed in October 2018, compelling banks to issue fresh regulations on deposits and withdrawals.

According to the legislators, the requirement to disclose sources of cash and the justification of large money withdrawals is inconveniencing and illegal according to the law. The MPs who have summoned CBK boss Patrick Njoroge for numerous committee sittings in the last few months have said that the Central Bank of Kenya is operating with impunity for not implementing the new laws, even going ahead to threaten termination of his contract this March.

CBK governor among other stakeholders in the sector is however opposed to the move by the parliamentarians who have been accused of passing banking laws in their interests. If the amendment is actualized, Kenya would be seen as if abetting terrorism, corruption and money laundering, at least according to the Financial Action Task Force (FATF) mandated with developing international standards to combat such impurities. The body that was founded in 1989, an initiative of the G7 countries.

Despite the amendment of the banking act in parliament, FATF demands that any country’s laws on banking should match those upheld by the institution.

Standing Orders

According to the Central Bank of Kenya, customers ought to fill outsource of funds, disclosure forms and provide supporting documents for transactions. This way, the institution will be in a position to flag suspicious accounts and in the same breath hinder illegal funds within the system.

CBK has accused the Members of Parliament of imposing laws on the sector ignorant of the internationally recognized Anti-Money Laundering laws.

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Melissa Daniels
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