The Central Bank of Kenya (CBK) on Monday warned individuals and companies engaging money transfer services without licenses.
In a statement, CBK noted that cases of entities operating payments and money remittance services without permit are on the rise.
“This is to inform members of the public that it is a criminal offence to provide money or value transfer services without a license or authorization from the CBK,” the statement read in part.
The regulator has warned Kenyans they risk losing their money because such transactions are not covered by law.
A photo of the Central Bank of Kenya in Nairobi.
“Licensed entities operate as payment service providers or money remittance providers and they conspicuously display the CBK license or authorization in their business premises, for ease of public reference,’ CBK advised.
CBK also announced that those found to be engaging in illegal money transfers would be prosecuted.
To help in weeding out the illegal businesses operating in Kenya, members of the public were asked to report anyone engaging in money transfer services without the necessary documents.
In particular, the regulator warned Kenyans against seeking money or value transfer services commonly referred to as Hawala from unlicensed providers.
Hawala is an informal method of transferring money without any physical money actually moving and is done outside commercial banks and other formal financial institutions.
The system is conducted in Kenya between brokers and is done without promissory notes as the system heavily relies on trust between the brokers.
Hawala is largely associated with money laundering because it provides anonymity during transactions hence the source of money cannot be traced.
The list of licenced companies to offer money remittance and payment services can be accessed at www.centralbank.go.ke
A photo of money recovered during a raid in Ngara on August 15 displayed on a table.