The Central Bank of Kenya (CBK) has managed to discard Ksh 7.39 billion worth of illicit cash from circulation after demonetization of old 1000 shillings note ended Tuesday.
While terming the process a success, Governor Dr. Patrick Njoroge said 209 million pieces of old notes were converted.
The regulator says 3,172 illegal transactions were flagged during the 4 months window period.
The governor said by the close of business on 30th September the bank had received only 209,661,000 pieces of 1,000 shillings old notes against a circulation of 217,047,000 pieces in June.
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This means that individuals are still in possession of the now obsolete 1,000 shillings notes worth over Ksh7 billion.
”7,386,000 pieces of KSh 1,000 did not return. This means Ksh 7,386,000,000 became worthless pieces of paper. The value of money that did not come back is equivalent to the value lost during the Goldenberg case” the CBK boss said.
Njoroge suspects that the amount is in the hands of individuals who were afraid to submit the monies due to accountability issues, this as the governor urges investigative agencies to continue probing the 3,172 transactions it flagged off during the demonetization period.
He disclosed that some 15 individual bank accounts have been closed for scrutiny.
CBK allayed fears of inflation due to the demonetization process saying inflation remains with the government’s target band and only individual wealth would take a hit.
The CBK terms the demonetization as a success especially in the fight against illicit flow of money in the country’s economy.
CBK has so far released 149 million pieces of new generation 1,000 note to ease the scarcity of the currency.
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