Real-time bank transfers of more than Sh1 million recovered from a 26-month low to touch a new monthly record in July as authorities started easing Covid-19 trade and travel restrictions.
Transactions cleared and settled through the Kenya Electronic Payments and Settlement System and Real Time Gross Payment System (KEPSS/RTGS) amounted to Sh3.32 trillion in July, the month when businesses started reporting increased activity, according to latest statistics.
This followed relaxation of global coronavirus containment measures which had curtailed movement into and out of Nairobi and Mombasa as well as domestic flights, except for goods and essential services providers since mid-March.
Instructions by businesses and high-net worth individuals to banks to transfer cash in their accounts increased 13.52 percent to 454,281 transactions in July compared with a month earlier — the highest volume in a year.
As a result, cash transacted went up 28.5 percent month-on-month from Sh2.59 trillion in June, signalling a recovery from a 26-month low of Sh2.25 trillion in May, Central Bank of Kenya (CBK) data shows.
Rising transactions in banking halls by businesses and wealthy households was also reflected in cheque payments which rose for the second month in a row after plunging to a decade-low in April and May.
The value of cheques approved at the Automated Clearing House, run by the Kenya Bankers Association (KBA), rose to Sh188.53 billion in July from Sh181.41 billion a month earlier.
RTGS and cheque payments require clients to visit banking halls to fill and sign off forms.
KBA chief executive Habil Olaka had told the Business Daily in an earlier interview that such visits had declined in early months of Covid-induced partial trade and travel restrictions on fear of contracting the contagious virus amid depressed sales.
The Stanbic Bank Kenya’s Purchasing Managers Index — a monthly measure of private sector activity — showed private sector activity rose for the first time this year in July, hitting the highest levels since June 2019.
The Central Bank of Kenya requires banks to strictly process and settle payments from Sh1 million through the real-time RTGS/ KEPSS system where cash reflects within four hours of getting instructions.
The real-time transaction-by-transaction payments enables the CBK to scrutinise and flag suspicious or unusual transaction that may be inked to money laundering or financing of terrorism.