ADVOKS GLOBAL · KENYA
Kenyan legislation
The Central Bank of Kenya (Currency Handling) Regulations
Edition: 2022-12-31 · In force
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1. Citation
These Regulations may be cited as the Central Bank of Kenya (Currency Handling) Regulations.2. Interpretation
In these Regulations, unless the context otherwise requires—"cash" means Kenya currency in form of either printed notes or minted coins of any denomination issued by the Bank for current use, and includes all notes and coins previously issued by the Bank;"cash defacement devices" means a security device fitted in a cash in transit box, approved by the Bank and intended to indelibly stain notes to achieve instant recognition that they have been stolen and to render them worthless;"cash in transit box" means a box fitted with cash defacement devices;"cash in transit client" means any person using the services of a licensed cash in transit operator;"cash in transit operator" means a person engaged in the business of transportation of cash; and"dye-stained bank notes" means notes that have been dye-stained by cash defacement device, approved by the Bank, as a result of an accidental discharge or through a triggered explosion in circumstances of attempted or actual security breach.3. Use of currency notes and coins
(1)Any person who wishes to use cash or images of cash in any publication or for any other purpose shall apply in writing to the Bank for approval.(2)No person shall use cash or images of cash, current or historical, for publication or promotional or any other purposes other than as currency without the prior written approval of the Bank.(3)A person making an application under paragraph (1) shall provide—(a)full name and address of the applicant;(b)nationality of the applicant;(c)information relating to the manner and purpose for which the images are intended to be used;(d)specimen of the works over which such use is intended;(e)a declaration that the intended use would not infringe on the Bank’s copyright over the cash.(4)An application for authority to make use of images of cash shall be considered by the Bank within fourteen days of receipt and the Bank shall notify the applicant of its decision in writing.(5)The Bank’s decision under paragraph (4) shall be final and the Bank shall not be obliged to render the reasons upon which any decision was reached.(6)A person who contravenes paragraph (2) of this Regulation shall, in addition to any criminal sanctions imposed under any law, be liable to a penalty, payable to the Bank, of one hundred thousand shillings and to a daily surcharge of ten thousand shillings if the breach is not remedied within the time specified for that purpose by the Bank.4. Licensing of cash in transit operators
(1)A cash in transit operator who wishes to operate a cash defacement device in the transit of cash, shall apply to the Bank in Form CH 1 set out in the First Schedule.(2)Every cash in transit operator applying for a licence to use a cash defacement device, shall be required to comply with the terms and conditions of use of such device and to meet the minimum technical specifications and industrial standards for the proposed device set out in the Second Schedule.(3)The compliance by an applicant with the terms, conditions, technical and other requirements of use of a cash defacement device shall be a mandatory requirement for licensing and the Bank shall not issue a licence until an applicant fully meets each requirement.(4)The Bank shall, upon satisfaction that an applicant meets the requirements under paragraph (3), and upon receipt of the fee prescribed in the Third Schedule, register the applicant and grant him a licence to use a cash defacement device.(5)A licence granted under paragraph (4) shall be renewable annually, upon fulfilment of the conditions of grant and payment to the Bank of the renewal fees prescribed in the Third Schedule.(6)The Bank shall regularly inspect and monitor every person licensed to operate a cash defacement device.(7)The Bank may, at any time during the tenure of a licence, suspend the licence for breach of any of the terms of licensing and if the breach is not remedied within thirty days, revoke the licence.(8)Any person who operates a cash defacement device without a licence or after the licence is suspended or revoked by the Bank, shall be liable to a penalty, payable to the Bank, of one hundred thousand shillings and in addition to a daily penalty of twenty thousand shillings for each day the breach is not remedied within the specified time.5. Exchange of defaced notes
(1)The Bank may exchange defaced notes where the notes—(a)have become unserviceable due to ordinary wear and tear;(b)have been mutilated, defaced or soiled accidentally; or(c)have been defaced by a licensed cash in transit operator through a cash defacement device accidentally or in circumstances of security threat or attack:Provided that the operator shall prove that the explosion occurred within the permitted use of the device under these Regulations.(2)Save for bank notes stained through use of a cash defacement device, any mutilated or defaced notes may be exchanged at the discretion of the Bank, upon presentation by the holder to the Bank, at the nearest branch or through institutions licensed by the Bank.(3)Upon receipt of mutilated or defaced bank notes under paragraph (2), the Bank may, with regard to the information provided?(a)agree to exchange the bank note;(b)defer its decision to allow for verification of the information provided; or(c)decline the application.(4)An application deferred under paragraph (3) shall be considered by the Bank and a decision made within sixty days from the date it was received and the Bank’s decision shall be final.(5)Notes stained through a cash defacement device shall be deemed to be proceeds of crime and shall be exchanged upon an application by a cash in transit operator to the Bank in Form CH 2 set out in the First Schedule.(6)A person, other than a cash in transit operator, who comes into possession of a dye-stained bank note shall not be eligible to apply for exchange but shall surrender such to the nearest police station, the Bank or any other financial institution and shall make a statement relating to the circumstances under which he came into possession of the dye-stained note:Provided that, such person shall not be deemed to have been involved in the underlying security breach, unless proven otherwise in a court of law.(7)Every person licensed to operate a cash defacement device shall, upon defacement of the cash through such device, either accidentally or through security related explosion, report the incident to the Bank within twenty four hours and shall thereafter lodge an application for replacement of the stained cash in Form CH 2 set out in the First Schedule.(8)The exchange of defaced notes under paragraph (5) shall be subject to payment by the applicant of the replacement costs prescribed in the Third Schedule.6. Exchange of cash defaced abroad
The Bank may consider applications for exchange of notes defaced outside Kenya under the criteria set out in regulation 5.7. Proof of validity of notes
(1)The Bank shall, prior to considering an application for exchange of defaced notes, verify and prove that the notes were genuine before their defacement.(2)No application for replacement of defaced notes shall be allowed if the Bank proves that the affected currency was counterfeit and the Bank shall, in addition to the penalty prescribed under paragraph (3), confiscate the counterfeit notes.(3)A person who presents for replacement notes that have been found to be counterfeit commits an offence and shall, in addition to any punishment provided for in any other law, be liable to a penalty, payable to the Bank, of twice the total face value of the counterfeit notes or two hundred thousand shillings whichever is lower.8. Keeping of records
(1)A person licensed under regulation 4 shall keep proper records and accounts of any cash, in notes or coins, in transit at any given time, and shall, whenever required, produce for inspection by the Bank the records and accounts.(2)Upon defacement of notes in transit through explosion of cash defacement devices, the Bank shall consider the replacement of the defaced notes that tallies with the records held by the cash in transit operator at the time of explosion of the defacement device and the Bank shall not consider for replacement any notes defaced without records.(3)Any person licensed to operate a cash defacement device who fails to keep proper records and accounts shall, upon determination by the Bank that proper records or accounts are not kept, be liable to a penalty not exceeding fifty thousand shillings and in addition to a daily surcharge of five thousand shillings if the breach is not remedied within the time specified for that purpose by the Bank.9. Insurance of cash in transit
(1)A person licensed under these Regulations shall, in addition to any other insurance cover taken out to provide protection against transit perils, take out an additional insurance cover to meet the replacement cost of any notes defaced through use of a cash defacement device.(2)The Bank shall be designated as the beneficiary of the additional mandatory cover taken out under paragraph (1), and shall duly advise the insurer on the replacement sum payable on the occurrence of every incident of security triggered defacement of cash in transit.(3)The replacement costs payable under the Third Schedule shall be recoverable from the licensee or the insurer and where the licensee pays the full cost, the benefits of the insurance cover shall be passed on to the licensee.10. General Penalty
A person who breaches any regulation and no penalty is specifically prescribed for the breach shall, in addition to any criminal sanction imposed under any other law, be liable to a penalty payable to the Bank of up to five hundred thousand shillings and to a daily surcharge of up to twenty thousand shillings if the breach is not remedied within the time specified for that purpose by the Bank.11. Revocation of L.N. 124/2010
The Central Bank of Kenya (Currency Handling) Regulations, 2010, are revoked.