CBK issues new guidelines to curb money laundering

CBK issues new guidelines to curb money laundering

Commercial banks will now be required to appoint money laundering reporting officers as the banking regulator steps up efforts to curb money laundering and terror financing activities.

A circular to bank chief executives from the Central Bank of Kenya (CBK) indicates that banks will have to conduct routine audits and assessments of customer assets to weed out possible laundering and terror financing related accounts and the risks posed to the bank.

CBK director of bank supervision Gerald Nyaoma said the new regulatory framework puts greater responsibility on bank officials to avoid complacency.

Banks will be required to identify the inherent money laundering risk of its client base and business relationship.

“The officer will be the central point of contact with the CBK for anti-money laundering/ combating the financing of terrorism purposes,” Mr Nyaoma said.

The new guidelines build on a previous directive to banks to report all transactions above Sh1 million as well as customer justification for large transactions.

This opens the door for scrutiny into institutions and individuals transacting large amounts of money.

The banking regulator said it was concerned by the threat posed by money laundering and terror financing to the integrity of the banking sector.

Bank boards and senior managers will also have greater responsibility in ensuring that the bank adopts a risk based approach to managing the risks.

The CBK will require banks to also monitor products and services that may be subject to abuse.

“Institutions should consider the potential money laundering and terrorism financing risks associated with each of its specific product or service,” he said.

The CBK expects banks to submit annual reports on money laundering and terror financing activities.

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