New regulations on cash transactions by the Central Bank of Kenya has seen Controversial businessman Paul Kobia take the Bank to Court.
Is the full disclosure and proof of the source of funds by customers prior to crediting their bank accounts the biggest problem to the businessman?
Kobia in a petition filed on Thursday says his constitutional right to privacy and property are likely to be infringed unless the court intervenes.
He wants the court to allow him to access his funds and to prevent CBK from closing his bank accounts.
Kobia says the rules will adversely affect foreign remittances which will, in turn, slow down economic growth.
The businessman claims the regulations have adversely affected banks by scaring away potential investors.
Through his lawyer Henry Kurauka, Kobia wants the court to direct CBK not to impose rules that make cash withdrawals difficult, saying it breaches the confidentiality of financial transactions.
“Article 231(1) of the Constitution gives the CBK the authority for formulating monetary policy and performing other functions conferred upon it by the Central Back Act and Banking act. However, the authority must be exercised in accordance with the law,” the petition reads.
Kobia says in a letter dated December 14 that Barclays Bank of Kenya threatened to close his account because of CBK’s “unreasonable regulations”.
Barclays had written to the businessman informing him that they had decided to stop providing him with banking services and they would close his bank accounts.
According to Kobia, many other customers, including him, are likely to suffer great losses if his bank accounts are closed.