CBK’s Crackdown on Unlicensed Money Transfer Agents

The Central Bank of Kenya (CBK) is taking a strong stance against unlicensed money transfer agents who are operating alternative remittance channels. In a public notice issued on Monday, the government’s financial authority highlighted ongoing schemes that it considers illegal under Kenyan law, including the use of “hawala.”

Hawala is an informal method of transferring money that doesn’t involve physical money movement. It relies on a vast network of money brokers who operate based on trust and honor. This method is often referred to as “money transfer without money movement” and provides an alternative to traditional banking systems.

The CBK stated, “It has come to the attention of the CBK that there are entities and individuals offering money or value transfer services without the necessary licenses. Money or value transfer services encompass payment services regulated under the National Payment System Act, 2011, and money remittance services regulated under the Money Remittance Regulations, 2013.”

The CBK has issued a warning to the public, emphasizing that providing money or value transfer services without proper authorization from the CBK is a legal offense.

While the CBK did not disclose the names of the rogue agents, they directed the public to a list of licensed money remittance providers available on their website. It’s important for consumers to verify the legitimacy of remittance providers to protect themselves from potential risks associated with unlicensed operators.

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