Less than 1 Percent Of Kenyans Have More Than USD 10K In Their Bank Accounts

Central Bank of Kenya Governor Patrick Njoroge has disclosed that only 1 percent of Kenyans have over USD 10K in their bank accounts.

The CBK Governor spoke on Tuesday while he appeared before the Parliamentary Committee on Finance and he told the parliamentary committee members that less than 0.7 per cent of bank accounts in Kenya have a balance of more USD 10 K.

Pending Laws

Dr. Njoroge appeared before the committe to explain why CBK has not implemented the Amendment to the Banking Act Section 33C that is coercing banks into issueing new regulations regarding deposits and withdrawals.

Earlier lawmakers led by majority leader of parliament Adan Duale had threatened to block the reappointment of the CBK governor accusing him of imposing his own regulations in the Kenyan banking sector. They pointed out the instance where one is unable to withdraw or deposit more than USD 10K a day without attracting the hawk-eyed Financial Reporting Centre, which is responsible for to detecting and reporting such transactions.

The MPs noted that such regulations as that of disclosure of sources of money and intended use has hindered Kenyans from banking huge sums of money.

Dr. Njoroge however revealed that the regulations that require full disclosure of cash transactions exceeding USD 10K are in line with the the International Anti-money Laundering regulations.

Consequences

He further disclosed that if an amendment is to be done as per the legislators wish, Kenya risks being blacklisted and cut off from the international financial fabric.

”Consequences of doing away with anti-money laundering are harsh. Kenyan banks will be blacklisted in the international market with international banks operating in the country recalled. Kenya will be regarded as a safe haven for money laundering,” he said. Njoroge urged banks to ensure illicit flows do not take place via their platforms adding that Kenya remains vulnerable to money laundering and terrorist financing due to their geographical location.

That being said, Kenyans could be unwilling to deposit huge sums of money to avoid exercising the reporting regulation. The emergence of mobile banking services could also be the reason why most Kenyans bank’s assets are low. Some Kenyans may opt to save money in digitised form.

Fear that a bank may collapse as for the case of Imperial Bank and Chase Bank may explain why 99.3 percent of bank accounts have less than USD 10 K.

Featured Image courtesy: thebalance.com