Banks are require to develop regulations prescribing conditions on deposits and withdrawals, CBK Governor Partrick Njoroge has said.
Dr Njoroge made the revelations when he appeared before the Parliamentary Committee on Finance and National Planning on Tuesday over contentious section 33c law, which has drawn heat over the past weeks.
Dr Njoroge denied claims by MPs that the law had inconvenienced people and businesses prompting some to avoid banking cash.
“Most Kenyans willingly report on any transactions as per the regulation,” he added.
Dr Njoroge also said the regulation was in line with global requirements to counter money laundering and terrorism financing.
“The requirement to report any transactions above Sh1 million or equivalent are contained in the requirements and provisions of the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA), which was effected in 2010” he said.
He said Kenya is particularly vulnerable to money laundering and terrorism because of its geography, advanced banking and financial sector and a largely cash-based economy.
On Monday, MPs termed the law illegal as it was not approved by parliament. They threatened not to renew the CBK Governor’s second term when the current one ends in March.