NAIROBI, Kenya Feb 25 – Director of Public Prosecution Noordin Haji has backed Central Bank of Kenya prudential guidelines requiring full disclosure of daily cash transactions exceeding Sh1 million.
Haji told the House Committee on Justice and Legal Affairs that the move which has met resistance from a section of MPs is to help in war against corruption.
“If we are going to succeed in the war against corruption and terrorism financing, those rules are very critical and I would urge you as Parliament to support the Central Bank Governor on this, because it is becoming increasingly difficult for example when we want to follow the money, where you have an individual who goes and withdraws Sh50 or Sh100 million cash and then redistributes this money in cash to individuals within government and then we are asked why can’t you catch the big fish?” he explained.
This comes after MPs castigated CBK Governor Patrick Njoroge claiming that the rules requiring disclosure of sources of cash and intended use have inconvenienced many, prompting some to avoid banking cash.
Haji cited a local bank of being “notorious in failing to report suspicious transactions” and is currently facing charges of aiding and abetting terrorism after it allowed a customer to withdraw Sh50 million within a week, funds which was later wired to Jilib, Somalia which is known to be the headquarters the Al Shabaab.
“We have got almost Sh30 million being withdrawn by an individual who over the years was only withdrawing a maximum of Sh400,000 in a month, but within a week somebody is withdrawing Sh30 million. And within two minutes someone is withdrawing Sh5 million through M-PESA. I think that begs us to ask question why this was happening and why they did not take any caution whatsoever. We have to ask for CCTV footage which the bank has been reluctant to give us,”
He added: “In essence we are also protecting them, if we do not to this then they will face an international barrage for this breach, so we are better off charging them here and maybe they will end up with plea bargaining to ensure that it still operates if they come with clean hands.”
Deputy DPP Dorcas Oduor backed her boss explaining that the regulations were in line with global requirements to counter money laundering and terrorism financing.
“Basically these criminals will always go to banks with weak systems, they went to other banks and they were refused. So they will look for a weak bank manager, weak teller, weak watchman.”
JLAC Chairman William Cheptumo explained MPs were unhappy because the regulations did not have Parliament’s approval as required by the Statutory Instruments Act.
The regulation, which took effect in 2016 requires anyone withdrawing or depositing more than Sh1 million to fill in a special form stating where the money is from or going to, who they are paying or receiving the money from and for what purpose.
Where a customer is unable to provide the information, the bank is required to immediately file a suspicious transaction report with the Financial Reporting Centre.
During debate in last Thursday Parliament, Minority Whip Junet Mohammed, Majority Leader Aden Duale and his Minority colleague John Mbadi said the ‘prohibitive regulations’ were stifling business as people resorted to keeping money in their houses.
Tongaren MP Eseli Simiyu urged his colleagues to comply with the regulations and simply state their sources of income if they acquired it legitimately.
National Assembly Finance Committee Chairman Joseph Limo informed the House that they had summoned Njoroge to appear before it on Tuesday.