A number of banks were on Tuesday yet to comply with a directive by the Central Bank of Kenya (CBK) requiring them to remove transaction costs for customers who move money between their mobile wallets and bank accounts.
Investigations by the Business Daily showed banks, including Equity Bank #ticker:EQTY, Standard Chartered #ticker:SCBK, Cooperative Bank of Kenya #ticker:COOP and Stanbic #ticker:CFC, charged fees for the transfers contrary to the CBK directive that was to take effect from Monday midnight.
The CBK reached a deal with the banks to waive the charges starting Monday night until June 30 as part of measures meant to curb the spread of the coronavirus.
Cashless payments are expected to cut down on the handling of cash and the risk of the virus being transmitted from person to person. Kenya has confirmed four cases of the virus so far.
On Tuesday, the Kenya Bankers Association (KBA) —the industry lobby— blamed the delayed removal of the charges on ‘technical hitches’.
“We sought advice from central bank who told us that it was starting at midnight. After that we (banks) had to amend our systems to comply with the directive,” KBA chief executive Habil Olaka told the Business Daily on the phone.
“It may be the case of delayed implementation that requires adjustment of the systems. The cases are specific and I prefer you talk to the specific banks.”
A customer who moved Sh1,000 from an Equity Bank account to M-Pesa on Tuesday mid-morning was charged Sh84 for the service.
Standard Chartered Bank charged its customers Sh40 for transferring Sh1,000 from the account to their mobile wallet at 11.49am on Tuesday. Stanbic Bank was yet to remove its Sh84 charge for moving Sh2,000 to an M-Pesa account.
Cooperative Bank of Kenya capped free transfers at Sh1,000, with a transfer of Sh1,500 facilitated by the Business Daily attracting a fee of Sh38.
Mobile telephony firms—Airtel and Safaricom #ticker:SCOM— effected the pact that saw them waive transaction costs on mobile money transfers under Sh1,000.
Standard Chartered and Stanbic failed to respond to questions by the Business Daily over the charges, but Equity said it needed board approvals to remove them.
“Equity Bank has worked out measures to respond to this advisory and have called for an urgent board meeting on Thursday 19th to deliberate and approve the executive management proposals and recommendations,” Equity Group managing director James Mwangi said in a statement on Tuesday.
Banks in Kenya generate billions of shillings from transactions, which became a prominent income stream when lending rates were capped by the State.
The legal caps on lending rates were imposed in September 2016 and removed in November last year after they restricted flow of credit to risky borrowers such as households and small businesses.
The CBK also approved an increase of the daily transaction limit to Sh300,000 per person from the current Sh140,000.
M-Pesa users will be able to hold more money in their wallets under the new changes, the central bank said, adding that the total monthly limit for transactions has also been removed.
“The following emergency measures will apply from midnight March 16, 2020 and will remain in place until June, 30, 2020,” the CBK said.
The various limits are designed to stem cases of money laundering and the central bank said it will monitor the implementation of the emergency measures to ensure they comply with anti-money laundering guidelines.
The new measures are also aimed at boosting the cashless economy that last year saw Sh4.35 trillion moved through mobile phones up from Sh361.39 billion in 2018, according to official data.
Credit: Source link