Members of national assembly have opposed stringent measures by the Central Bank of Kenya governor Prof Patrick Njoroge requiring full disclosure on cash transactions exceeding Sh1 million.
The MPs claimed that the rules requiring disclosure of sources of cash and intended use have inconvenienced many, prompting some to avoid banking the cash.
The MPs said some banking regulations were illegal as they did not have Parliament’s approval, as required by law.
They accused CBK Governor Patrick Njoroge of operating with “impunity” and threatened not to renew his term when it ends in March.
The National Assembly’s Finance Committee, chaired by Joseph Limo, has summoned Dr Njoroge to appear before it tomorrow, failing which “Parliament will take action”.
“We gave the CBK a second chance to bring the regulations but he has failed … they engaged us in a cat-and-mouse game. We have issued the last invitation,” said Mr Limo.
He claimed that Kenyans were being harassed by banks and could not get access to their money.
The regulation, which took effect in 2016, requires anyone withdrawing or depositing more than Sh1 million ($10,000) to fill in a special form stating where the money is from or going to, who they are paying or receiving the money from and for what purpose.
Where a customer is unable to provide the information, the bank is required to immediately file a suspicious transaction report with the Financial Reporting Centre.
Yesterday, Kenya Bankers Association (KBA) Chief Executive Officer Habil Olaka said the regulations were in line with global requirements to counter money laundering and terrorism financing.
Dr Olaka said the banking industry had no problem with the rules as they were meant to safeguard their systems.
“We are part of the global system that seeks to insulate the industry against money laundering and financing of terrorism,” he said.
During heated debate in Parliament, Suna East MP Junet Mohammed – who moved the motion – said the regulations were stifling business.