The National Assembly Speaker, Moses Wetang’ula, has declared the Central Bank of
Kenya (CBK) Governor, Dr. Patrick Njoroge’s rules on large cash transactions illegal.
In a ruling posted on the parliamentary website, Wetang’ula stated that the CBK rules
are illegal because they were not approved by the House as required by the Statutory
Instruments Act before they came into force.
He also took issue with the Teachers Service Commission (TSC) guidelines on the
delocalization of teachers for the same reason.
The CBK Governor’s circulars require financial institutions not to receive money
exceeding Sh1 million without the customer providing reasons as to where the money
came from.
Similarly, the financial institutions are barred from authorizing withdrawals above Sh1
million without explanations for their intended use.
To enforce the CBK Governor’s circulars, those who want to make large cash
withdrawals are required to fill a form issued by their banks explaining where the money
is being taken or where it has come from.
Although the CBK’s motive was to check illicit financial flows such as money laundering
and terrorism financing among others, failure to seek the approval of the MPs renders
their implementation illegal.
The National Assembly Speaker stated that “any instrument said to be made pursuant to
a power granted by an Act of parliament must be brought before parliament for
scrutiny”.
The House plans to publish non-compliant regulations in the near future.
