Kenya’s Central Bank Cracks Down on Unlicensed Money Transfers
On Monday, the Central Bank of Kenya (CBK) issued a warning to companies and individuals who utilize money transfer services without proper licenses.
CBK noted in a statement that instances of unauthorized operation of money remittance and payment services by entities are increasing.
“This is to inform members of the public that it is a criminal offense to provide money or value transfer services without a license or authorization from the CBK,” the statement read in part.
Kenyans run the risk of losing their money, as such transactions are not regulated by law, the regulator has warned.
“Licensed entities operate as payment service providers or money remittance providers and they conspicuously display the CBK license or authorization in their business premises, for ease of public reference,’ CBK advised.
Additionally, CBK declared that individuals convicted of unlawful money transfers would face legal action.
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To facilitate the eradication of illicit enterprises operating within Kenya, the general populace was urged to report instances of individuals providing money transfer services without the requisite documentation.
Specifically, the regulator issued a warning to Kenyan citizens discouraging them from utilizing unlicensed providers of money or value transfer services, also known as Hawala.
Hawala is an informal method of transmitting funds outside of commercial banks and other formal financial institutions, in which no physical currency is transferred.
The operation of the system takes place in Kenya among brokers, devoid of promissory notes, due to the system’s substantial reliance on mutual trust among the brokers.
Hawala is commonly linked to money laundering due to its ability to ensure anonymity during transactions, thereby obviating the need to trace the origin of the funds.
One can access the list of authorized companies providing money transfer and payment services at www.centralbank.go.ke.
Kenya’s Central Bank Cracks Down on Unlicensed Money Transfers