This archive report was first published on 30 September 2019.
As the deadline for exchanging old 1,000 shilling notes approaches, the Central Bank of Kenya (CBK) has flagged at least 900 bank accounts for suspicious deposits. The exchange of the old notes ends today, September 30, 2019.
According to a top official, authorities investigating the issue had agreed that the owners of the accounts could only be contacted after the closure of the three-month window to avoid raising alarm and scaring others from making deposits.
Although the cumulative value of the deposits is not immediately known, investigators say the amount is 'significant'. A meeting will be held on Wednesday to assess the integrity of the doubtful accounts.
Some of the accounts that had been flagged have since been cleared as the depositors were found to be big traders, including supermarkets, warehouses, or foreign exchange bureaus. Most of the individuals involved have deposited more than 5 million shillings.
CBK Governor Patrick Njoroge has refuted claims of a shortage of the new 1,000 shilling note, stating that there will be no extension of the deadline to return the old notes, which will cease being legal tender on October 1.
He also announced that it will take two to three years to phase out the other denominations. The Financial Reporting Centre and Banking Fraud Investigation Unit have been given a list of the depositors to check their deals and establish the legitimacy of the deposits.
On June 1, the Government ordered the return of old 1,000 shilling notes, saying they will cease to be legal tender on October 1. Last week, the regulator raised an alarm over large transactions of old 1,000 shilling notes in Narok County.
