Politicians battling for various seats in the coming August polls are crying foul over the Central Bank of Kenya (CBK) guidelines introduced last year that impede any withdrawal beyond Sh1 million without proper documentation.
According to a local daily, the politicians have however resorted to new tactics to circumvent the CBK guidelines that were introduced by CBK Governor Patrick Njoroge to fight money laundering.
1. Multiple accounts
One of the tactics used by an unnamed politician was to open multiple bank accounts under different names. The MP could then withdraw from the accounts and cumulatively beat the CBK ceiling.
“I have opened five accounts with different names and therefore I can withdraw five million in one day,” said the MP.
2. Cheques
According to Bondo MP Gideon Ochanda, one could also write cheques using different names and withdraw over Sh10 million in a single day.
“You can use different names in a cheque and withdraw even Sh10 million in a day, so as much as the law is good, those with more money still get their way,” said Ochanda.
3. Millions under the mattress
Ochanda added that another trick to also beat the CBK guidelines was by keeping their cash in the house, hassle free.
“You have seen when the Ethics and Anti-Corruption Commission officers raid a home of a politician or anybody under investigations and millions of shillings in cash is recovered, an indication that people keep money in their houses instead of taking it to the bank,” added Ochanda.
4. Wire money to friends accounts
Kikuyu MP Kimani Ichung’wa added his voice to the rising displeasure over the guidelines and revealed that many politicians were transferring money to their trusted friend’s bank accounts then withdraw it.
“It has really made life difficult for us. At the moment, we need to pay people whose cars we hire for campaign tours, tents, chairs and other items. When you have a big function and the bills of all these surpass Sh1 million, what do you do? Nobody trusts a cheque from politicians, especially during this campaign period, we have to pay in cash,” lamented Ichung’wa.
The legislators described the guidelines as a nuisance and unnecessary inconvenience and vowed to repeal them.
While introducing the new guidelines last year, Dr Njoroge observed that they were aimed at reducing the risk inherent in cash transactions, such as losses due to fraud and theft.
The directive stipulated that; "In compliance with this requirement, all customers making transactions that meet the stipulated amounts will be required to complete a form that captures the source of funds, reason for the transaction rather than electronic means and where the money will be taken after it leaves the bank".
