Banks have been advising customers with safe deposit boxes to reveal the contents of their repositories in line with a Central Bank of Kenya directive issued in May.
Earlier this year, the Central Bank ordered banks to have their customers disclose the contents of the safe-deposit boxes by December 31 as a means to minimize the risk of these services being used for illegal activities such as money laundering. Safe deposit boxes allow customers to stash valuable items in an isolated and highly protected bank vault.
“We have received new guidelines from Central Bank of Kenya requiring banks to verify the contents of locker deposit boxes availed to their customers in line with existing Anti Money Laundering and Proceeds of Crime Regulations,” I&M said in a notification to clients with such boxes.
“Consequently, we request that you arrange to visit (your branch) where your safety box is held at your earliest convenience but not later than 31 October 2020 for this exercise.”
Habil Olaka, the Kenya Bankers Association (KBA) Chief Executive has welcomed the move citing it will deter clients who may have stored unlawfully acquired items.
“For the customers who were genuinely using the boxes for keeping things legally acquired safely away, not much change other than the additional intrusive requirements from the banks. The few who have stashed illegally acquired items in the boxes will have to move elsewhere. This keeps the banking system insulated from penetration by money laundering activities,” Mr. Olaka said.
“This also places responsibility on the banks to verify the contents of the safe deposits to ensure that they conform to the guidelines. Illicit content can no longer pass,” Mr. Olaka added.
In May 2019, police nabbed approximately US$ 20 million (Ksh. 2 billion) in counterfeit cash, stashed in a customer’s safety deposit box, at the Barclays Kenya Queensway Branch (now Absa Kenya) in Nairobi.
The confiscation highlighted how easily criminal-minded individuals could flout the privacy afforded by safety deposit boxes to conduct illegal activities.