NAIROBI, Kenya, Aug 19 – The Central Bank of Kenya (CBK) on Friday opened the country’s third currency centre in Meru, which will help ease the transit of cash from individual banks to its units.
The initiative, which was carried out in partnership with the Kenya Bankers Association (KBA) is expected to not only help minimise theft of cash in transit, but also reduce transport cost for the banks in the region.
The centre follows the opening of two other facilities in Nyeri and Nakuru last year, which together have helped banks reduce their transit costs by over 30 percent.
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“The currency centres account for over 12 percent of the total currency activities in the country,” said CBK Governor Prof Njuguna Ndung’u.
Through them, banks are able to transport money at the close of business every day within minimum distance.
The concept was developed last year, after approximately Sh100 million in transit was stolen at different times raising questions on how to protect banks particularly those that are in areas where there are no CBK units.
However, the facilities also have other benefits such as issuing out clean notes to customers and hence improving the quality of currency in circulation in the regions being served.
Previously, banks were giving out old currency to avoid shuttling money from one town to the other in search of clean notes and coins.
And while pointing to the myriad of benefits that the banking fraternity was accruing from this initiative, Deputy Prime Minister and Minister for Finance Uhuru Kenyatta challenged them to pass on these benefits of lower transaction costs to consumers.
“Banks should lower the cost of banking services to customers now that currency centres have helped reduce their cost of doing business,” the minister who was the chief guest stressed.
He however welcomed the initiative adding that it would ensure that the financial sector is able to contribute towards the attainment of the Vision 2030 objectives.
“I applaud the financial sector for effectively embracing this objective and working hard for its realisation,” said the minister.
Mr Kenyatta observed that its contribution to the economy could not be gainsaid, pointing to the impressive growth in profit, asset base and customer deposits that the industry has been registering in the last few years.
“These remarkable results have had a positive effect in driving our economy,” said the Finance Minister.
Also present were the Chief Executive Officer of the Kenya Commercial Bank Martin Oduor-Otieno and his Cooperative Bank counterpart Gideon Muriuki who hinted that they would consider the appeal to lower the transaction costs.
“Banks appreciates this and will do everything for the interest of the economy,” Mr Oduor-Otieno pledged.
