– The move, according to Bank of Tanzania, is set to help CBK tame flow of illicit cash
– Tanzanian banks have been urged to carefully monitor money flow to or from Kenya
– CBK recently unveiled new bank notes and said the KSh 1,000 note will cease to be legal tender from October
– It has thus urged those in custody of the money exchange it not later than October 1
The Bank of Tanzania has suspended conversion of Kenyan money to Tanzanian currency.
In a statement dated Friday, June 7, the regulator said it was advised to freeze the exercise by CBK in a move to tame illicit cash flows.
This emerges one week after CBK launched new currency where it also announced it will demonitise the old KSh 1,000 bank notes.
“The Bank of Tanzania has been informed by the Central Bank of Kenya (CBK) of the issuance of the new series of banknotes effective Friday, May 31, 2019, with a view to combat illicit financial flows and counterfeits into the Republic of Kenya.
Consequently, CBK has suspended currency conversion and repatriation of all Kenyan currency to restrict illicit flows into the Republic of Kenya, and will not accept Kenyan currency with immediate effect,” read the statement addressed to all Tanzanian Banks.
This therefore means those wishing to convert Kenyan money to Tanzanian tender can do it in Kenya.
Tanzanian lenders have in this light been directed be keen of any transaction to or from Kenya to help net fraudsters.
“Given the gravity of illicit flows concerns raised by CBK, you are required to subject all flows from and into the Republic of Kenya to enhanced due diligence,” the bank directed.
When CBK Governor Patrick Njoroge unveiled the new currency, he expressed optimism that expunging the KSh 1,000 note would help reduce corruption and money laundering.
According to Njoroge, the denomination was largely hoarded by fraudsters.
He added the note was being used to commit other economic crimes both locally and beyond borders.
“To deal with these concerns conclusively, all the older one thousand shillings will be withdrawn. All persons have until October 1, 2019, to exchange those notes, after which the older one thousand shillings notes will cease to be legal tenders,” said Njoroge.
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