In a recent public notice, the Central Bank of Kenya (CBK) has issued a stern warning to the public regarding unauthorized money transfer agents who are offering alternative remittance channels without the necessary license from the apex bank.

The CBK, acting as the government’s fiscal agent, revealed on Monday that it possesses information about ongoing schemes that it deems criminal under Kenyan law. Specifically, the warning extends to services such as “hawala,” an informal method of transferring money that operates on trust and the reputation of an extensive network of money brokers.

Described as a “money transfer without money movement,” hawala serves as an alternative remittance channel existing outside the realms of traditional banking systems. The CBK expressed concern about entities and individuals engaging in money or value transfer services without the required license, emphasizing that these services fall under the purview of regulations such as the National Payment System Act of 2011 and the Money Remittance Regulations of 2013.

The public advisory from the CBK underlines the legal consequences, stating, “It has come to the attention of the CBK that there are entities and persons providing money or value transfer services without the requisite licence…Money or value transfer services include payment services regulated under the National Payment System Act, 2011 and money remittance services regulated under Money Remittance Regulations, 2013.”

The central bank cautioned individuals against participating in such unauthorized services, emphasizing that providing money or value transfer services without authorization from the CBK is a punishable offense under Kenyan law.

This warning holds particular relevance for the Kenyan audience, serving as a reminder of the importance of adhering to regulatory frameworks in financial transactions. As the CBK takes a proactive stance against unlicensed money transfer activities, the public is urged to exercise caution and ensure compliance with the established legal requirements to avoid legal repercussions.