Sniff out dirty cash in safe boxes, CBK orders lenders

Sniff out dirty cash in safe boxes, CBK orders lenders

Business News
Banks have until end of this year to verify contents of their customers’ safes and report suspicious ones in new push to stamp out money laundering.

The days of individuals hiding their ill-gotten wealth or cash in banks’ safe deposit boxes are numbered. This is after the Central Bank of Kenya (CBK) gave banks until the end of this year to ensure that safe boxes and lockers are free of any dirty cash and illegal items as the regulator intensifies the war against dirty money. In a circular to all chief executives of all regulated financial institutions, CBK asked lenders to verify contents of the boxes and review their current policies and procedures to minimise the risk of these services being used for illegal activities, including money laundering. Safe boxes, not just in banks but in other places such as hotels as well, have become safe havens for illegally acquired wealth which includes cash and precious metals such as gold and silver. However, CBK has said that such boxes in banks must be subjected to rules governing illicit financing, known as Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations. Customers will thus be obliged to reveal the content of the safety box and the same will be provided to CBK at the end of every trading day. “It is only through verifying the contents of the boxes that they (banks) can, for instance, understand their customer, develop procedures to combat money laundering through safety boxes and report any suspicious activities,” said CBK’s Director of Bank Supervision Department Gerald Nyaoma. Risks exposure Verification of the contents of safety boxes or lockers to ascertain that they do not contain illegal items, including proceeds of crime, said Mr Nyaoma, should be completed by end of this year and should be done in the presence of a customer. Besides verifying the contents of the safety boxes, banks have also been tasked with reviewing their current policies and procedures on safety boxes/lockers as well as their terms and conditions to align them with the Proceeds of Crime and Anti-Money Laundering Regulations (POCAMLA). “The revised policies and procedures should be submitted to the Central Bank by December 31, 2020,” said Nyaoma. Last year, a customer allegedly kept Sh2.6 billion in fake dollars at BSA Bank of Kenya, then Barclays Bank of Kenya, Queensway branch, Nairobi, leading to the suspension of the service […]

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