CBK warns Kenyans against engaging unauthorized money remittance services firms
The Central Bank of Kenya (CBK) has cautioned Kenyans against engaging firms providing money remittance services without licenses
The Central Bank of Kenya (CBK) has cautioned Kenyans against engaging firms providing money remittance services without licenses.
In a statement on Monday, November 6, CBK noted that unlicensed entities are on the rise and are providing services contrary to the National Payment System Act, 2011, and Money Remittance Regulations, 2013.
“This is to inform members of the public that it is a criminal offence to provide money or value transfer services without a license or authorization from the CBK. Such services do not enjoy the protection of the law and consumers stand to lose in case of any default by the providers of these services,” CBK stated.
CBK warned Kenyans that they risk losing their money to such entities adding that it will be taking action on any individual or firm found doing illegal money transfers.
The bank in particular pointed out Hawala, an informal method of transferring money outside financial institutions.
Hawala is an informal method of transferring money without any physical money actually moving and is done outside commercial banks and other formal financial institutions.
The system is conducted in Kenya between brokers and is done without promissory notes as the system heavily relies on trust between the brokers.
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Hawala is largely associated with money laundering because it provides anonymity during transactions hence the source of money cannot be traced.
“This is to caution and/or warn members of the public against seeking money or value transfer services such as “hawala” from unlicensed service providers,” CBK stated.
“The CBK has a duty to identify entities and persons providing unlicensed or unauthorized money or value transfer services and to have them prosecuted in a court of law.”
The bank called on members of the public to submit information on the identities and physical locations of entities and persons providing money or value services without a license or authorization from CBK.
The list of licenced companies to offer money remittance and payment services can be accessed at www.centralbank.go.ke
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