Kenyan commercial banks have expressed opposition to a government plan to increase the threshold for reporting large cash transactions by 50% to $15,000 (approximately Ksh2.1 million). The banks argue that this decision could potentially lead to increased money laundering and terrorism financing in Kenya. The proposed amendment, which has been approved by President William Ruto’s cabinet, aims to spare bank customers from disclosing the source, intended use, and beneficiaries of transactions below $15,000 to the Financial Reporting Centre (FRC).
The Kenya Bankers Association (KBA) has voiced its concerns about raising the threshold, citing Kenya’s geopolitical location in the Horn of Africa. The KBA believes that retaining the current threshold of $10,000 (approximately Ksh1.41 million) would be more appropriate due to the volatility of exchange rates and inflation rates in the country.
Kenya is a signatory to international frameworks aimed at combating money laundering and terrorism financing, and the KBA believes that raising the reporting threshold could increase risks related to illicit financial activities and terrorist financing. The association also pointed out that other countries, such as the European Union member states and Malaysia, have recently revised their reporting thresholds downward.
The proposed amendment to the Anti-Money Laundering and Combating of Terrorism Financing Laws is currently being discussed in the National Assembly’s Finance and National Planning Committee through public hearings. The debate centers on finding a balance between reducing the administrative burden on bank customers and ensuring effective measures against illicit financial activities.