The Central Bank of Kenya (CBK) has fronted new laws to check mobile money laundering, which are now under deliberation by stakeholders.
Among the proposals by the CBK include the scrutiny of transfers above KSh100,000 (approx. US$1,200) daily and weekly transfers of sums above KSh300,000 (approx US$3,500).
The CBK proposes mobile money transfer companies set transaction or payment account limits, noting that the higher the payment account limits, the higher the risk of money laundering, especially in instances where users have more than one account.
The regulations will also reduce terrorist financing through the model, with experts warning that electronic payment systems could easily be utilised by criminals.
Mobile phone companies will be expected to ensure their systems comply with the anti-money laundering law and submit a monthly report to the CBK showing measures to safeguard the system.
The proposals suggest heavy penalties for the companies that do not comply, including a fine not exceeding KSh25 million (approx. US$300,000) or the amount of the value of the property involved in the offence, whichever is higher.
Individuals engaged in the vice will also risk a jail term not exceeding 14 years, a fine of KSh5 million (approx. US$60,000) or the amount of the value of the property involved in the offence, whichever is higher, or both the fine and imprisonment.
Safaricom corporate affairs director Nzioka Waita told Business Daily the company was in the process of contributing to the deliberations.
“We are currently in the process of making our written submissions on the issues you have raised and as such it will be inappropriate for us to comment on the same publicly, while consultations with the Central Bank and other policy makers are still in progress,” said Waita.
Experts warn, however, that the new regulations could result in a slowdown in the uptake of services.
In the year ending June 30, 2012, mobile money hit 570.9 million transactions, an increase from the previous year’s figure of 364 million transaction. Total mobile money transactions in Kenya in the last financial year hit a high of 1.4 trillion shillings (approx. US$16.7 billion).
Some regulations are already in place. Currently the rules say a service provider must “take reasonable measures to satisfy itself as to the true identity of any applicant seeking to … carry out a transaction … with it, by requiring … the true identity of the applicant, such as a birth certificate, passport, national identity card, a drivers’ licence or other official means of identification as may be set forth in other regulation.”
