CBK cancels licences of four forex bureaus

Central Bank of Kenya. Photo/FILE
Central Bank of Kenya. Data from Central Bank shows the balance at the Depositors’ Protection Fund (DPF) stood at Sh26.94 billion in 2010 compared to protected deposits of Sh157,174 billion, leaving 83 per cent of depositors exposed. Photo/FILE 

The Central Bank of Kenya (CBK) has revoked licences of four foreign exchange bureaus as tough regulation and increased capital requirements drive some players out of business.

CBK announced on Friday it had cancelled the licences of Overseas Forex Bureau, Blue Nile, Alok and Amazon.

The bank has tightened regulation in the industry by raising the threshold of reporting requirements to check cases of money laundering while also increasing minimum capital levels to improve financial strength of the bureaus.

Governor Njuguna Ndung’u, who signed the notice revoking the licences, did not however give reasons for the cancellations.
The bank did not also respond to our request for comments.

“Some foreign exchange bureaus have been experiencing problems because the Central Bank raised the minimum deposit to $30,000 ($3 million) from $5,000 (Sh500,000),” said Sam Angwenyi, the chairman of the Kenya Forex Bureau Association.

“Some are asking for revocation because they think this amount is a lot,” he added.

The bureau firms were supposed to comply with the new circular by April this year.

Mr Angwenyi, who also runs Ukay Forex Bureau, said the Central Bank had become more stringent in its inspections, but added it would help to prevent possible crimes.

Outstanding issues

He said the CBK had also made it mandatory from this year that a person could not have more than one forex bureau, which forced the owners either to sell or close some.“We have been having meetings with the Central Bank almost every month to discuss any outstanding issues and we are aware some revocations have taken place,” said Mr Angwenyi.

A supervisor at the Amazon Forex, Mohamed Musa, said they were aware of the revocation but said the institution was making remedial efforts to have the licence reinstated.“We are aware of it but we have a process in place so that we can have the licence reinstated,” said Mr Musa.

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