Money Laundering, Low Exchange Transactions & Early Withdrawal Dates Stain Demonetisation
From huge donations by politicians and businessmen in churches and schools, the emergence of many construction projects, payments in huge cash bundles to destroying property for insurance payment, ‘cleaning’ money in the country has been on the rise since the process of demonetization began in June.
Narok has been on the limelight following the purchase of wheat using large amounts of the old one thousand notes not only by local traders but also a majority hailing from other counties across the country. Money laundering in the country has affected cash flow in banks from Ksh222 billion to Ksh196 billion as of August. The four-month demonetization programme has seen a 9.8 percent drop in money outside banks. This money has been reported to be in people’s pockets and mattress accounts with most of it being used to pay for goods and services, therefore, affecting money circulation in the country.
According to the CBK governor Patrick Njoroge, only 24 transactions were above Ksh2 million with 99 percent of the transactions being less than Ksh2 million. This goes against the perception that people would avail huge amounts of money to exchange within the four-month programme.
Deadline Date
With the deadline set for September 30th, Kenyans are in a hurry to exchange the one thousand note series and more so business owners. Kenyan citizens have raised concerns over the deadline dates set by merchants; supermarkets, mobile money agents, restaurants, among other business premises. According to most notices old series, one thousand notes will not be accepted way ahead of CBK’s withdrawal deadline of October 1.
With some beginning as early as September 25th, retailers fear handling large amounts of the old 1000 notes even as the monetary authority maintains that the notes will only be worthless come end of business September 30th.
CBK governor Patrick Njoroge has steered clear of the illegal notices containing different deadline dates to avail the old notes, therefore, closing out Kenyans still holding old currency notes.
According to the governor, the demonetisation process is currently well over 70 percent with over 100 million pieces of the old series one thousand notes exchanged with the new currency notes.
