Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: CBK Issues New Regulations on Use and Defacement of Currency

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Kenya: CBK Issues New Regulations on Use and Defacement of Currency

Monday, 15 December 2008

According to new regulations, any use of images of currency needs prior CBK approval, and the defacement of currency has been partly decriminalised, allowing security companies the use of new devices for cash in transit.

Regulations in a new legislative supplement published in 21 November 2008 and printed on 9 December 2008 decree that “No person shall make use images of currency or images of currency notes or coins for publication or promotion or other purposes without prior written approval of the bank.” The written application to the Central Bank of Kenya (CBK) will have to state the nationality of the person or company and the purpose for which the images are intended to be used. Such an application shall be considered within fourteen days by the CBK. These new regulations will lead to restrictions by publishing, advertising and PR firms that routinely use currency images for advertising and promotional purposes.

In a ground breaking move, the CBK has given a wide ranging exemption to sections of the Penal Code that criminalise the defacement and or mutilations in of currency notes under whatever circumstances. Passed in 1966, three years after Kenya’s independence and disgruntled white settlers mutilated currency notes bearing the images of Kenya’s first president Jomo Kenyatta, the law was passed by parliament making it unlawful to deface, tear, cut or otherwise mutilate any currency note. Doing so made one liable imprisonment for a term not exceeding three months or to a fine not exceeding two thousand shillings or to both.

But in a move to safeguard and reduce incidences of robberies and thefts of money on transit, the CBK has given some wide exemptions that will also open up a new avenue of business for security companies: Businesses can now apply for a license from the CBK to use or operate a cash defacement security device in the transit of money. The devices, common in other parts of the world and in particular Europe, releases a dye or any produces a physicochemical process that marks or destroys cash if a safe or briefcase or any other container containing the money is opened without authority.

Money so destroyed will be exchanged by the CBK for usable notes at its desecration. An application for exchange of mutilated or defaced notes will however have to be made to the CBK in writing at the CBK’s nearest bank. Such an application shall include the number and total value of the mutilated money, the cause of the mutilation and the denominations mutilated. Moreover, any business or person who obtains a license to use the cash defacement device will be required to take additional insurance cover to provide protection against defacement. This will be in addition to insurance taken for transporting money.

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