Perhaps in a move meant to curb money laundering and curbing illicit cash flow, Co-Op bank now requires customers to show proof indicating the source of funds.
An aggrieved client complained about inconveniences of sending money to a Co-Op bank client via Pesalink, a digital money transfer service that allows one to send money from their accounts to any local bank directly.
According to Mungai, the recipient was blocked from acceding the cash until they gave proof.
Hello Munga. We wish to advise that it is a requirement to provide a source of funds documents whenever it is requested for by the bank. You may issue the recipient with documentation indicating the reason for the transfer so that they may access the funds. ^EL— Co-op Bank Kenya (@Coopbankenya) September 16, 2020
This is a requirement by our regulators, the Central Bank of Kenya. ^EG— Co-op Bank Kenya (@Coopbankenya) September 16, 2020
It’s unclear why Co-Op wanted proof for transaction yet CBK capped the acceptable transactions to below 1,000,000. What’s clear is Pesalink caps all transactions to 999,999 and one can’t transact above meaning the amount sent by Mungai was under Sh1M.
Under the CBK rules, anyone withdrawing or depositing more than a Sh1 million (or $10,000) is required to fill in a special form stating where the money is from or is going, who they are paying or receiving the money from and for what purpose, either way.
Whole Co-Op Bank insists they’re working as per the regulations, other competitors are allowing free transactions to the standard limit.
We’ve made Pesalink transactions a lot more convenient for you. Set your limit up to Ksh. 999,999 and make secure bank-to-bank transfers from your phone through the Stanbic Bank Kenya Mobile Banking App.#LetsKeepMovingForKenya#KeepCalmGoDigitalBanking pic.twitter.com/UEf30z7nku— Stanbic Bank Kenya (@StanbicKE) September 8, 2020
A question that remains unanswered
@CBKKenya is it true that if one receives money in their account via @IPSL_Kenya PesaLink, one must present source of funds documents from the sender before withdrawing the money?https://t.co/kZMtWzBo3Y— Mungai Kihanya (@mungaikihanya) September 16, 2020
Who is the suspect: me [the sender] or the Co-Op bank customer [recipient] or both?— Mungai Kihanya (@mungaikihanya) September 16, 2020
BTW: it's not about "indicating the source of funds". They know where the money came from. They asked for a letter from the sender!
Ama they want to know where I [the sender] got it from?
It would be totally exhausting to have to explain yourself, go through long processes to convince the banjo that the money in your account is legit. However it’s also a good measure in curbing illicit cash flow but shouldn’t it be within the stipulated regulations of the CBK that only questions amounts above 1M?
So next time before you allow a cash transfer into your Co-Op Bank you might want to give them a call or ensure you have the proper documentation or frustrations could be awaiting you at the bank’s entrance.