Bulk payments made through real-time bank transfers in the first quarter of 2020 rose at the fastest pace in six years, official statistics show. This partly signals progress in the war on dirty cash on the back of demonetisation exercise last year.T...
Bulk payments made through real-time bank transfers in the first quarter of 2020 rose at the fastest pace in six years, official statistics show. This partly signals progress in the war on dirty cash on the back of demonetisation exercise last year.
Transactions cleared and settled through the Kenya Electronic Payments and Settlement System and Real Time Gross Payment System (KEPSS/RTGS) climbed 13.85 per cent to nearly Sh8.303 trillion from Sh7.27 trillion.
This is the highest year-on-year growth in the first quarter since 2014 when the high-value deals by wealthy Kenyans and companies rose 18.00 per cent to Sh5.68 trillion, according to the Central Bank of Kenya (CBK).
The CBK, the financial services sector regulator, requires banks to strictly process and settle payments from Sh1 million through the real-time RTGS/ KEPSS system where cash reflect within four hours of getting instructions under guidelines refreshed in October 2009.
The real-time transaction by transaction payments enables the CBK to scrutinise and flag suspicious or unusual transactions that may be linked to money laundering or financing of terrorism.
The CBK demonitised old Sh1,000 notes between June and September last year to clean up illicit financial flows in the economy by questioning the source of cash for those who were exchanging large sums of old notes with new ones.
Some Sh7.4 billion in old Sh1,000 notes was not returned to the banking system.
Some shrewd traders can, however, avoid the regulatory scrutiny by splitting up bulky payments using other channels such as cheques where transactions are capped at Sh1 million and take up to two days to be cleared, or through cash withdrawals in banking halls.
The value of cheques, cleared at the Automated Clearing House run by the Kenya Bankers Association, during January-March 2020 was flat, rising 0.27 percent to Sh647.05 billion.
Original Source: Business Daily
