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Limit for disclosing source, purpose of cash to be raised above Sh. 1mn



When you go to withdraw above Sh. 1 million at the bank, the law requires that you reveal the purpose of the funds. At the same time, you are required to reveal the source of your cash when making a bulk deposit of over Sh. 1 million.

But these disclosure requirements are now set to change. On Wednesday, President Uhuru Kenyatta issued a directive that will see the National Treasury develop a framework that will raise the disclosure limit above $10,000 or about Sh. 1.1 million.

According to the president, the limit has hurt the growth of micro- and small-sized businesses which largely transact in cash under regulation 31 of the Proceeds of Crime and Anti-Money Laundering Regulations 2013.

“It should also be recognised that the implementation of the framework by banks has been onerous for Micro, Small and Medium Enterprises (MSMEs),” he said. “Cash still remains an important payments channel for MSMEs, representing 80 percent of all their financial transactions. The implementation of cash transactions requirements by banks has not been facilitative of the operations of MSMEs and has to some extent inhibited their growth.”

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Currently, financial institutions are required to keep records of cash transactions of more than Sh. 1 million and report suspicious deals to the Financial Reporting Centre (FRC). “I hereby order the National Treasury, after consultations with other stakeholders, to immediately cause the upward revision of the cash transactions reporting threshold from the current mark of Sh. 1 million applicable to both withdrawals and deposits by customers. The financial institutions will retain their reporting obligations to the Financial Reporting Centre,” President Uhuru said.

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