Kenya: President Kenyatta urges Crucial Interventions for the Banking Sector

President Uhuru Kenyatta has urged the country’s National Treasury and other stakeholders to immediately revise upwards the cash transactions threshold for KSh 1.0 Million applicable to both withdrawals and deposits by Bank Customers.

“However, Banks and Other financial institutions will retain the financial reporting obligations to the Financial Reporting Centre,” said President Kenyatta during his last Mashujaa Day celebrations as the 2022 General Elections, to be held in August next year, looms large in the background.

Kenyatta said Kenya is a financial hub due to its technology-driven banking sector

He said Kenya’s Banking sector has been able to make huge strides resulting in the country being seen as East Africa’s Financial Hub due to efficiencies secured by technology.

“The gains made in digitization of financial processes and transactions have made it possible to better track and trace illicit flow of cash,” said President Kenyatta.

He said while Kenya was committed to anti-money laundering and combating the financing of terrorism, implementation of the cash transaction limits reporting requirements appear to have hurt the growth of many Macro, Small and Medium-Sized Enterprises.

The President also directed Treasury and other relevant Authorities to put a moratorium on the listing of non-performing loans of less than KSh 5 Million with Credit Reference Bureaus(CRBs) for a period of 12 months ending September 2022.

He also said defaulters with loans of less than KSh 5 Million listed with CRBs from October 2020 to date will not have that listing incorporated in their credit report for the 12 months period ending September 2022.

As a result of the COVID-19 pandemic, the Central Bank of Kenya directed banks to suspend the listing of defaulters with CRBs. This suspension, which began in April 2020 lasted until September 2020.

While many firms are on a recovery path, there are also numerous macro, small and medium-sized enterprises that are still struggling to get back on their feet.

The Head of State also urged Treasury to engage all digital payment providers with the aim of deepening and expanding the use of digital payment channels, especially by small-scale traders and households.