Heed CBK advice on KYC

The delay in enacting the presidential directive on raising the minimum threshold for reporting bank transactions under anti-money laundering laws shows that there is a need for further consultation on the matter, to avoid offending international conventions.

The Central Bank of Kenya (CBK) had already hinted at some unease at making such a move, given the massive effort that has been put in to clean the financial sector of dirty cash deals.

The banking regulator is also being forced to choose between enforcing the directive and violating the guidelines by the global Financial Action Task Force (FATF) which sets the reporting limit at $10,000. While the directive was issued in good faith to ease the flow of cash for businesses, it is clear that there are real risks of abuse if it is raised to a higher threshold.

This is especially the case in an election year when flows of dirty cash are likely to go up.

The solution to the impasse lies in the improvement of conduct among banks, which were accused of harassing business people over the Sh1 million limit.

They should heed the advice of the CBK governor and get to know their customers and their transaction history better.