SPECIAL ISSUE 273

Kenya Gazette Supplement No. 56 19th April, 2013

(Legislative Supplement No. 25)

LEGAL NOTICE NO. 66

THE CENTRAL BANK OF KENYA ACT
(Cap. 491)
THE MONEY REMITTANCE REGULATIONS, 2013
PART I—PRELIMINARY
1—Citation.
2—Interpretation.
PART II—ESTABLISHMENT AND LICENSING
4—Licensing.
5—Application for a licence.
6—Evaluation of application.
7—Issuance of a licence.
8—Licence not transferable.
9—Validity of licence.
10—Core capital.
11—Appeal.
12—Renewal of licence.
13—Revocation of licence.
PART III—OWNERSHIP AND MANAGEMENT
14—Shareholders.
15—Approval of shareholders.
16—Key officers.
17—Approval of key officers.
18—Vetting.
19— Fit and proper test.
20—Prohibitions.
21— Disqualification of shareholders and officers.
PART IV—OPERATIONS OF MONEY REMITTANCE
OPERATORS
22—Authorized activities.
23— Prohibited activities.
24—Split transactions.
25—Agents.
274274 Kenya Subsidiary Legislation, 2013

26—Place of business.
27—Inspection of premises.
28—Notification of business hours.
29—Temporary closure of business.
30—Bank accounts.
31—Training.
33—Records.
34—Returns.
35—Fees.
36—Financial year.
PART V—ANTI-MONEY LAUNDERING
37—Anti-Money Laundering Measures.
PART VI—CUSTOMER PROTECTION
38—Disclosure.
39—Consumer redress.
PART VII—INSPECTION AND AUDIT
40—Inspection.
41—External auditors.
PART VIII—MISCELLANEOUS
42—Administrative obligations.
43—Penalties.
44—Suspension and revocation.
45—Transitional clause.
THE CENTRAL BANK OF KENYA ACT
(Cap. 491)
IN EXERCISE of the powers conferred by sections 57 of the
Central Bank of Kenya Act, the Central Bank of Kenya makes the
following Regulations:—
THE MONEY REMITTANCE REGULATIONS, 2013
PART I—PRELIMINARY
1. These Regulations may be cited as the Money Remittance Citation.
Regulations, 2013.

2. In these Regulations unless the context otherwise requires - Interpretation.

“agent” means an entity contracted by a money remittance

operator and approved by the Central Bank to provide the services of
money remittance on behalf of the money remittance operator;

“Cabinet Secretary” means the Cabinet Secretary for the time

being responsible for matters relating to finance;
 Kenya Subsidiary Legislation, 2013 275

“key officer” means a director, chief executive officer or any

other senior officer of a money remittance operator who has been
vetted and approved by the Bank to hold a senior position in a money
remittance business;

“licensing” means approval granted in accordance with these

No. 9 of 2009
regulations to allow the holder of the licence to carry on money
remittance business;

“money laundering” has the meaning assigned to it under the

Proceeds of Crime and Anti-Money Laundering Act;

“money remittance business” means a service for the

transmission of money or any representation of monetary value without
any payment accounts being created in the name of the payer or the
payee, where -

(a) funds are received from a payer for the sole purpose of
transferring a corresponding amount to a payee or to another payment
service operator acting on behalf of the payee; or

(b) funds are received on behalf of, and made available to the
payee;

“money remittance operator” means a person licensed to

undertake money remittance business;

“outlet” means a place of business of a money remittance

operator that has been approved by the Bank; and

“spot transaction” means the purchase and sale of currencies or

the purchase and sale of an y other instruments approved by the Bank
with immediate delivery against an agreed price.
3. (1) These regulations shall not apply to— Exemptions.

(a) authorized banks;

(b) authorized mortgage finance companies;
(c) the Kenya Post Office Savings Bank;
(d) the Postal Corporation of Kenya;
(e) deposit taking microfinance institutions; and

(f) any other entity approved by the Bank.

(2) Where the Kenya Post Office Savings Bank or Postal Cap. 491
Corporation of Kenya intend to transact foreign exchange business,
they shall be required to seek permission from the Bank under section
33A (3) of the Central Bank of Kenya Act.
PART II—ESTABLISHMENT AND LICENSING
4. A person shall not provide money remittance services unless Licensing
such person—
276276 Kenya Subsidiary Legislation, 2013

(a) is incorporated as a limited liability company under the

Cap 486.
Companies Act;
(b) has obtained the approval of Bank for the proposed
business name before incorporation and has the words
“money remittance” or “money transfer” as a brand name ;
and

(c) is licensed to provide money remittance services under these

regulations.

5. An application for a licence to conduct money remittance Application for a

licence.
business shall be made to the Bank in the form set out in the First
Schedule accompanied by—

(a) a non-refundable application fee of twenty thousand shillings

payable to the Bank by—

(i) bankers cheque;

(ii) real time gross settlement (RTGS); or
(iii) any other payment method that may be approved by
the Bank;

(b) a certified copy of the applicant’s certificate of

incorporation;

(c) a certified copy of the applicant’s memorandum and articles

of association;

(d) a feasibility study by the applicant indicating the nature of

the planned business, organization structure, internal control
systems and monitoring procedures of the company and
covering the following aspects—

(i) the name and location of the proposed business

premises;

(ii) ownership structure;

(iii) governance and management structure;

(iv) market analysis;

(v) proposed products;

(vi) three year projected financial statements; and

(vii) business continuity plan;

(e) bank statements of the applicant, shareholders and directors

of the proposed money remittance operator for a period of
six months prior to the date of application;
 Kenya Subsidiary Legislation, 2013 277

(f) Form/CBK/MRB/2 as set out in the Second Schedule of

these regulations in respect of the shareholders and key
officers of the money remittance operator;

(g) credit reports from a credit reference bureau for the

shareholders and key officers of the money remittance
operator;

(h) an undertaking by the applicant to comply with the relevant

laws and any directives issued by the Bank;

(i) a declaration by the applicant that none of its directors or

shareholders holds a similar position or role in another
money remittance operator;

(j) a declaration by the applicant that none of its directors or

shareholders has ever—

(i) been declared bankrupt;

(ii) participated in the management of a collapsed

institution, or

(iii) been convicted of a criminal offence involving fraud,

money-laundering, tax evasion or any other act of
dishonesty;

(k) a policy manual detailing procedures that the applicant will

put in place to comply with any anti-money laundering
obligations;

(l) where a money remittance operator intends to provide

money remittance services through an international location,
a list of all agent locations around the world that are duly
authorized entities according to the laws on money
remittance in those countries; and

(m) such other information as may be required by the Bank from

time to time.

6. (1) When evaluating an application for a licence to operate as Evaluation of

application.
a money remittance operator, the Bank shall take into account the
following—

(a) the applicant’s statement of financial affairs;

(b) the adequacy of the applicant’s capital structure, earning

prospects, business and financial plans;

(c) the history, character and integrity of the applicant’s

shareholders and proposed directors;
278278 Kenya Subsidiary Legislation, 2013

(d) the competence and integrity of the applicant’s proposed

management;

(e) whether the public interest shall be served by the granting of

the licence to the applicant; and

(f) any other factors as may be determined by the Bank.

7. (1) The Bank may issue a money remittance licence if the Issuance of a
licence.
applicant meets the requirements set out in these regulations.

(2) Where the Bank is dissatisfied with the information

submitted by the applicant for purposes of processing the application,
the Bank may request for additional information before making a final
determination.

(3) Where the Bank is satisfied that all the necessary

requirements have been met, the Bank shall within ninety days of the
applicant lodging the application, issue a letter of intent to the applicant
advising the applicant to submit to the Bank –

(a) a banker’s cheque for one hundred thousand shillings or such

other amount as may be prescribed by the Bank being
licence fees; and

(b) a security consisting of either a surety bond, an irrevocable

letter of credit from a commercial bank licensed pursuant to
the Banking Act or a deposit taking microfinance business Cap. 488
licensed pursuant to the Microfinance Act, an insurance bond
of not less than five million shillings or an amount equal to Act No. 19 of 2006
one percent the applicant's projected total volume of business
for the first year of operation.

(4) Where a money remittance operator is licensed by the Bank -

(a) there shall be no refund of the licence fee paid to the Bank in
the event that the licence is cancelled or revoked or a money
remittance operator ceases to carry on business at any time
before the expiry of the licence;

(b) there shall be no proration of the licence fee paid in the

course of the year.

(5) The Bank may in conformity with the regulations add, vary
or substitute any condition to the licence.

8. The licence granted shall not be transferred, assigned or Licence not

transferable.
encumbered in any way.

9. The licence granted under regulation 7 shall expire on the Validity of

licence.
thirty-first day of December in each year.
 Kenya Subsidiary Legislation, 2013 279

10. Where a money remittance operator is licensed under these Core capital.
Regulations, it shall at all times maintain a minimum core capital of not
less than twenty million shillings.

11. Where the Bank finds that the applicant has not met any or Appeal.
all of the conditions, the Bank shall decline the application and inform
the applicant accordingly and advise the unsuccessful applicant that an
appeal to the Cabinet Secretary for review of the decision may be
lodged within thirty days from the date thereof.

12. (1) An application for renewal of a licence to conduct money Renewal of

licence.
remittance services shall be submitted to the Bank in the form set out in
the First Schedule of these regulations at least two months before the
expiry of the licence.

(2) A licensee who fails to pay the prescribed fees for renewal of
a licence shall pay double the license fee, if payment is made within
ninety days after expiry of the license.

(3) A licensee who fails to submit an application for renewal of

license and to pay the license fee as prescribed under regulation 12 (2)
shall have the license revoked.

(4) The Bank may renew a licence where -

(a) it is satisfied that the licensee has been operating in

conformity with these regulations;

(b) the licensee has paid the prescribed licence renewal fee and
all outstanding penalties imposed on the licensee under these
regulations;

(c) the licensee has obtained the security outlined under

regulation 7 (3)(b) equivalent to one percent of the total
business turnover for the preceding twelve months to the
thirtieth day of September of each year subject to a minimum
of five million shillings;

(d) the licensee has fulfilled its tax obligations and submitted a
current certified copy of a tax compliance certificate or its
equivalent as issued by the Kenya Revenue Authority; and

(e) the licensee, its shareholders and directors have not defaulted
in repayment of any credit facilities granted to them by any
institution as indicated in the credit reports or any other
source as the Bank may from time to time determine;

(5) Where the licensee submits an application for renewal of a

licence as provided under subregulation (1), the licence shall be
deemed to continue in force until the application for renewal is
determined.
280280 Kenya Subsidiary Legislation, 2013

13. A licence for money remittance business shall be revoked if Revocation of

licence.
the licensee fails to conduct the money remittance business within
twelve months of the date of issue of the licence without the written
consent of the Bank or at any other time as provided under regulation
44.
PART III—OWNERSHIP AND MANAGEMENT
14. A shareholder of a money remittance operator shall not own Shareholders.
more than ten percent share capital of the money remittance business
without prior written approval of the Bank.
15. An application for the approval of shareholders shall be
Approval of
forwarded to the Bank accompanied by the following— shareholders.

(a) a duly completed fit and proper form, FORM/CBK/MRB/2,

as set out in the Second Schedule of these regulations;
(b) a certified copy of the identity card or passport;
(c) curriculum vitae;
(d) two passport size photographs;
(e) a certificate of good conduct;
(f) a credit report from a credit reference bureau;
(g) a collective undertaking signed by each shareholder to the
effect that the proposed capital is not from the proceeds of
crime; and
(h) any other document as may be required by the Bank from
time to time.
16. (1)A money remittance operator shall have the following key Key officers.
officers—
(a) at least two directors; and
(b) a chief executive officer and other senior officers responsible
for all the operations of the money remittance business as
may be determined by the Bank.
(2) The key officers referred to in sub-regulation (1)(b) must
have—
(a) attained at least an ordinary level certificate of education or
its equivalent; and
(b) adequate knowledge of money remittance operations and
knowledge of applicable laws.
(3) The chief executive officer and all senior officers approved
by the Bank shall be full time employees of a money remittance
operator.
17. An application for the approval of the key officers referred to Approval of
key officers.
in regulation 16 shall be forwarded to the Bank accompanied by the
following—
 Kenya Subsidiary Legislation, 2013 281

(i) a duly completed fit and proper form, FORM/CBK/MRB/2,

as set out in the Second Schedule of these regulations;

(ii) a certified copy of the identity card or passport;

(iii) a certified copy of the academic and school leaving

certificates;

(iv) curriculum vitae;

(v) two passport size photographs;

(vi) a certificate of good conduct;

(vii) a credit report from a credit reference bureau; and

(viii) any other document as may be required by the Bank from

time to time.
18. A person shall not become a shareholder or be appointed as a Vetting.
key officer, unless such a person is—

(a) certified as fit and proper by the Bank; and

(b) not disqualified from holding office under these Regulations.

19. (1)The following factors shall be considered in determining Fit and proper
test.
whether or not a person is fit and proper to own or control a money
remittance business—

(a) conviction of an offence of fraud or any other offence of

which dishonesty is an element;
(b) contravention of the provisions of any law designed to
safeguard the integrity of the financial system or for the
protection of members of the public against financial loss
due to dishonesty, incompetence or malpractice by persons
engaged in the provision of financial services;
(c) being a past director or senior officer of an institution
licensed by the Bank that has been liquidated, placed under
statutory management or whose licence has been revoked;
(d) past engagement in any business practices that, in the
opinion of the Bank, were fraudulent, prejudicial or
otherwise improper whether lawful or not;
(e) defaulting in repayment of any credit facility made to him by
any institution;
(f) evasion of taxes;
(g) removal from an office of trust on account of misconduct,
abuse of office, corruption or incompetence in the
immediately preceding ten years;
282282 Kenya Subsidiary Legislation, 2013

(h) legal disability; and

(i) such other factors as may be determined by the Bank.

(2) The Bank shall undertake due diligence by seeking

information from any person, financial institution or company which
the Bank believes to be in a position to assist in determining the fitness
and propriety of the proposed shareholders and key officers.

20. A person shall not become a shareholder or an officer in Prohibitions.

more than one money remittance operator.

21. (1)The Bank may disqualify shareholders or officers of a Disqualification of

shareholders and
money remittance operator who - officers.

(a) fail to adhere to these Regulations or any directives issued by

the Bank; and

(b) fail to meet vetting requirements on an on-going basis.

(2) A money remittance operator shall ensure that no person shall

be an officer or an employee of the money remittance operator, or if
already in employment, shall be disqualified and shall not thereafter be
eligible to hold office or be in the employment of any money
remittance operator if such person is—

(a) an undischarged bankrupt or enters into a composition or

scheme of arrangement with his or her creditors;

(b) convicted of an offence involving fraud or dishonesty; or

(c) removed from office under the provisions of these

regulations.

PART IV—OPERATIONS OF MONEY REMITTANCE

OPERATORS

22. (1) A money remittance operator shall deal in inbound and Authorized t
activities.
outbound international money transfer transactions.

(2) The transactions referred to in subregulation (1) shall

consist of the following activities—

(a) foreign exchange transfers consisting of the acceptance of

monies for the purpose of transmitting them to persons
resident in Kenya or another country.

(b) spot foreign currency transactions involving cash and other

instruments approved by the Bank.

(3) A money remittance business shall not engage in any other

business other than as authorized by the Bank.
 Kenya Subsidiary Legislation, 2013 283

(4) The following conditions shall apply in the transaction—

(a) a payment transaction shall be executed in the currency

agreed between the parties; and

(b) where a currency conversion service is offered before

initiation of a payment transaction or at the point of payment,
the money remittance operator must disclose all charges as
well as the exchange rate to be used for converting the
payment transaction.
23. (1)A money remittance operator is not authorized to— Prohibited
activities.

(a) act as an authorized dealer in gold;

(b) engage in lending money;

(c) engage in deposit taking;

(d) maintain current accounts on behalf of customers;

(e) establish letters of credit; or

(f) act as a custodian of funds on behalf of customers.

(2) Despite subregulation (1) a money remittance operator may

carry out any other activity that the Bank may approve from time to
time.

24. A money remittance operator shall not allow or process a Split

transactions.
transaction that is or appears to have been deliberately split into small
amounts equivalent to ten thousand United States dollars or below to
avoid the requirement of reporting to the Financial Reporting Centre as
provided under the Proceeds of Crime and Anti-Money Laundering No. 9 of 2009
Act.
25. (1) A money remittance operator may conduct money Agents.
remittance business through an agent subject to approval by the Bank
and shall—
(a) submit to the Bank a signed copy of the contract between the
money remittance operator and the agent;
(b) any other additional information as may be required by the
Bank ; and
(c) conduct the business in compliance with both the applicable
laws.
(2) The contract between a money remittance operator and an
agent shall contain the following—
(a) a statement that the money remittance operator is wholly
responsible for and liable for all actions or omissions of the
agent.
284284 Kenya Subsidiary Legislation, 2013

(b) measures to mitigate risks associated with agent business

including limits, customer transactions, cash management,
cash security, security of agent premises and insurance
policies;
(c) specific services to be rendered by the agent;
(d) the rights, expectations, responsibilities and liabilities of both
parties;
(e) a statement that the Bank shall have free, unfettered and
timely access to the internal systems, documents, reports,
records, staff and premises of the agents in so far as money
remittance business is concerned and shall exercise such
powers as it may consider necessary;
(f) appropriate policies and procedures to detect, prevent, report
or otherwise deal with incidences of money laundering ;
(g) responsibilities of the agent to deliver supporting transaction
documents;
(h) a statement that all information or data that the agent collects
in relation to agency money remittance services, whether
from the customers, the money remittance operator or from
other sources, is the property of the money remittance
operator;
(i) adequate oversight safeguards for the money remittance
operator to address instances of non-compliance by the agent
with the stipulated obligations;
(j) prohibition from charging the customer any fees other than
the fees agreed upon between the money remittance operator
and the customer at the initiation of the transaction;
(k) business hours of the agent;
(l) suitable limits on cash holding by the agent and also limits
on individual customer payments and receipts;
(m) confidentiality of customer and user information;
(n) remuneration for the agent;
(o) a transition clause on the rights and obligations of the money
remittance operator and the agent upon termination or
cessation of the agency contract; and
(p) a requirement for the money remittance operator’s prior
approval to be obtained when an agent is seeking to transfer
the agency business.
26. (1) A money remittance operator shall obtain approval from Place of business.
the Bank before opening an outlet and shall designate one of the outlets
as its head office.

(2) An application to open an outlet as provided in subregulation

(1) shall be in the form set out in the Third Schedule and shall be
 Kenya Subsidiary Legislation, 2013 285

accompanied by the prescribed fees and any other requirements as

prescribed by the Bank.
(3) The Bank shall before granting any approval under these
regulations in respect of opening an outlet, satisfy itself that -
(a) the money remittance operator is financially sound;
(b) the capital structure, earning prospects, business and
financial plans of the money remittance operator are
adequate;
(c) the public interest will be served by the opening of a new
place of business in that location;
(d) the outlet will enhance the operations and performance of the
money remittance operator;
(e) the money remittance operator has integrated the systems to
process information of all its outlets; and
(f) the money remittance operator is fully compliant with the
Act.
(4) The Bank may grant an approval to operate an outlet if an
applicant fulfils the requirements in subregulation (2).
(5) The Bank may, in granting approval under sub subregulation
(3), impose such other conditions as it may consider necessary.
(6) A money remittance operator shall not be allowed to sublet,
lease or authorize any other person to undertake any other business or
offer any other product or service in its business premises other than as
approved by the Bank.
(7) The business premises of a money remittance operator shall
be accessible to the general public and the Bank.
(8) A money remittance operator shall not relocate its business
from the approved premises without the prior written approval of the
Bank.
(9) A money remittance operator shall display prominently at
each of its business premises -
(a) the current licence to engage in money remittance;
(b) the business hours;
(c) details of the tariffs to be charged;
(d) a notice informing the customers that they are entitled to be
issued with a receipt for any money remittance transactions;
and
(e) a notice to the effect that the money remittance operator is
not allowed to maintain current accounts on behalf of the
clients.
27. The Bank may at its own discretion and from time to time Inspection of
premises.
carry out an inspection of premises prior to granting approval for the
commencement of operations to determine the suitability of the
286286 Kenya Subsidiary Legislation, 2013

premises for money remittance business and the adequacy of the

management information system, administrative and operational
processes and the internal control system.

28. A money remittance operator shall notify the Bank and its Notification of
business hours.
customers of—
(a) the business hours for each of its outlets;
(b) any intended changes in business hours, in any of their
places of business, fifteen days in advance before the
changes are effected.
29. A money remittance operator facing operational challenges, Temporary
closure of
disclosure of which shall be made to the Bank, will be required to seek business.
prior written approval from the Bank to close or suspend the operations
of the money remittance operator temporarily.

30. (1) A licensee shall maintain an account entitled “customers’ Bank accounts.
account” in the name of the licensee at any commercial bank licensed Cap 488
pursuant to the Banking Act or microfinance business licensed pursuant Act No. 19 of 2006
to the Microfinance Act in Kenya.

(2) All customer funds deposited with a money remittance

operator for transmittal to a foreign country shall be deposited in the
account referred to in subregulation (1).
(3) A money remittance operator may offset and deposit funds in
the customer’s account, in order to effect the transfer of funds in
accordance with the instructions of the clients.

(4) A money remittance operator shall maintain complete and

accurate account records.

(5) A money remittance operator shall produce, upon request by

the Bank, all documents pertaining to the account activity, including,
but not limited to, bank statements, cheque books, deposit slips and
reconciliations or other comparable account records.

31. A money remittance operator shall ensure that its officers are Training.
adequately trained in the operations of the money remittance business
and regulatory requirements.
Foreign
32. (1)A money remittance operator shall be allowed to net off exchange
payments during settlement with counterparties. payments.

(2) All foreign exchange inflows and outflows of money

remittance operators shall be received through commercial banks,
documented and advised to the Bank in the prescribed format.
Records.
33. (1)A money remittance operator shall maintain a sound
management information system that facilitates efficient collection and
processing of statistical data and information required to provide audit
trails for use by internal auditors, external auditors and the Bank.
 Kenya Subsidiary Legislation, 2013 287

(2) A money remittance operator is required to maintain

accurate and meaningful originator and beneficiary information for a
period of not less than seven years on funds remitted or received by
requiring the sender or recipient to complete and sign an application
form, which shall contain the following data and information -

(a) date of transaction;

(b) name and signature of remitter;

(c) name of beneficiary;

(d) national identity card or passport number of customer and in

the case of refugees an alien card, refugee card or UNCHR
card or any other additional documents that the money
remittance operator may consider necessary;

(e) present address;

(f) permanent address;

(g) telephone number (if applicable).

(h) nationality;

(i) amount and currency to be remitted or received;

(j) the principal activity of the customer conducting the

transaction;

(k) purpose of remittance; and

(l) source of funds.

(3) A money remittance operator shall, for every transaction,

issue an accurate receipt which shall contain the following
information—

(a) full names of the customer;

(b) identity card or passport number of customer;

(c) the type and amount of currency sent or received;

(d) the transaction number;

(e) the nature, time and date of the transaction;

(f) name and address of the money remittance operator and

name of the employee who served the customer;

(g) a brief statement on source or purpose of the funds;

288288 Kenya Subsidiary Legislation, 2013

(h) customer signature; and

(i) commission charged if any.

(4) All transactions generated by the money remittance operator

in the course of its business activities must be posted in its books of
accounts.

(5) A money remittance operator shall maintain the following

records—
(a) a list of all transactions;
(b) a daily summary of all monies received and sent;
(c) a fixed assets register; and
(d) any other records applicable to the money remittance
operator or as may be specified by the Bank .
(6) A money remittance operator shall keep accurate and up to
date records and ensure that the records are verified on a daily basis.
34. A money remittance operator shall submit the following Returns.
returns to the Bank on-line or as directed in the prescribed format—

(a) daily returns of money sent and received equivalent to or

above ten thousand United States dollars including
customers who transact repeat transactions in a day
amounting to ten thousand United States dollars;

(b) weekly returns of money remittance transactions not later

than 3.00 p.m. on the first working day of the following
week;

(c) quarterly balance sheet and profit and loss account within
thirty days after the end of every quarter;

(d) audited balance sheet and profit and loss accounts within
three months after the end of the financial year; and

(e) any other return as may be prescribed by the Bank from time
to time.
35. The prescribed fees payable by a money remittance operator Fees.
in respect of various applications shall be as set out in the
Fourth Schedule.
36. The financial year for all money remittance operators shall
Financial year.
be the period of twelve months ending on the thirty-first day of
December in each year.
PART V—ANTI-MONEY LAUNDERING
37. (1) A money remittance operator shall be required to comply Anti money
laundering
with the Proceeds of Crime and Anti-Money Laundering Act and the Measures.
relevant regulations. No. 9 of 2009.
 Kenya Subsidiary Legislation, 2013 289

(2) Subject to subregulation (1) a money remittance operator

shall submit to the Bank an independent audit of its anti-money
laundering policies.
PART VI—CUSTOMER PROTECTION
38. A money remittance operator shall disclose the following Disclosure.
information in writing to their client—
(a) the fees, charges or commissions, if any, and other
conditions applicable to the money remittance services
rendered;
(b) that the money remittance operator is neither a deposit taking
nor lending institution within the meaning of the Banking Cap 488,
Act, the Microfinance Act or the SACCO Societies Act and No. 19 of 2006,
No. 14 of 2008
is not subject to any deposit protection; and
(c) any customer care procedures for complaints together with
the address, customer care contact number and other contact
details for the money remittance operator.
39. (1)A money remittance provider shall, within six months Consumer redress.
after commencing business establish a customer care system to address
the complaints of clients.

(2) A money remittance provider shall provide easily understood

information about the customer care system, including the customer
care contact number, at its head office, outlets as well as the premises
of agents.

(3) A complaint may be lodged orally or in writing, but in each

case must be lodged within a period of thirty days from the date of
occurrence.

(4) A money remittance provider shall acknowledge all

complaints filed with them.

(5) At the time of making a complaint the complainant shall be

advised of the expected actions and timing for investigating and
resolving the complaint, provided that all complaints shall be resolved
within sixty days of being lodged.

(6) A money remittance provider shall put in place processes to

provide complainants with sufficient information and the means to
inquire on the progress of complaints and such processes may include
complaint reference numbers or other identifiers in order to facilitate
timely and accurate responses to subsequent inquiries by complainants.

(7) A complainant shall be advised of the outcome of the

investigation of their complaint, and any resulting decision by the
money remittance provider.

(8) Where a complainant is not satisfied with a decision reached

pursuant to a complaint, the money remittance provider shall give the
290290 Kenya Subsidiary Legislation, 2013

complainant the option of pursuing an identified escalation process by

which the decision may be examined by a suitably qualified person in
the organization.

(9) The complaint handling process shall be provided free of

charge but a money remittance provider may impose a reasonable
charge for complaint handling processes where investigation of the
complaint requires the retrieval of records more than three months old,
and where the retrieval results in an incremental expense or significant
inconvenience to the money remittance providers. Any such charges
shall be identified and agreed to by the complainant.

(10) A money remittance provider shall make adequate

provision to ensure that people with disabilities are able to access their
complaint handling processes, including ensuring that such
complainants can be easily represented by their authorised
representatives in order to make a complaint. In cases where such
complainants specifically request assistance in lodging complaints,
money remittance providers shall be obliged to provide reasonable
assistance.
PART VII—INSPECTION AND AUDIT

40. (1) The Bank may inspect the books of accounts and other Inspection.
documents of a money remittance operator at any time in order to
ensure compliance with these regulations and guidelines issued by the
Bank.

(2) The Bank may require a money remittance operator to

produce books of account or any other documents for purposes of
inspection.

(3) The Bank may, by notice in writing, require a money

remittance operator to provide information to it, in such manner and
form as may be specified by the Bank for purposes of assessing
compliance with these regulations.

(4) An authorized officer of the Bank may, at any time, enter

any premises where a money remittance operator is carrying on
business, or any premises where it is reasonably suspected that any
business is being carried on in contravention of these regulations.

(5) After conducting an inspection, the Bank may—

(a) require a money remittance operator to put in place remedial
measures as it may consider necessary;
(b) institute an audit;
(c) call for an investigation;
(d) impose a financial penalty; or
(e) take any other action as it may consider necessary.
 Kenya Subsidiary Legislation, 2013 291

41. (1) A money remittance operator shall, at its own expense, External
Auditors.
appoint an external auditor who shall be a member of good standing of
the institute of Certified Public Accountants of Kenya to carry out an
audit of the transactions in its business.

(2) The Bank may require an auditor appointed under

subregulation (1) to—
(a) submit to the Bank such information as it may require in
relation to the audit carried out by the auditor;
(b) extend the scope of an audit of the business and affairs of the
business and to submit a report to the Bank;
(c) carry out any examination or establish any procedure in any
particular case; and
(d) submit a report to the Bank on any matter referred to in
paragraph (a) or (b).
(3) The money remittance operator shall be responsible for the
remuneration of the auditor for the services rendered.
PART VIII—MISCELLANEOUS

42. The key officers of a money remittance operator shall— Administrative

actions.

(a) ensure that the activities conducted by the money remittance

operators are in full conformity with these regulations;

(b) ensure the money remittance operator maintains, at all times,

an effective system of internal controls; and

(c) develop appropriate policies and procedures to guide all

areas of its operations including accounting, human
resources and information technology.

43. (1) The Bank may levy monetary penalties— Penalties

(a) for failure to comply with these regulations or non-

compliance with any directives issued by the Bank not
exceeding five hundred thousand shillings; or

(b) on non-compliance with other directives not covered under

the regulations.

(2)The following shall constitute specific violations by a money

remittance operator or any other person of directives of the Bank which
shall be subject to the assessment of monetary penalties-

(a) failure by a money remittance operator to—

(i) submit annual audited accounts and a copy of the

auditor’s report in the prescribed form to the Bank,
within three months after the end of its financial year;
292292 Kenya Subsidiary Legislation, 2013

(ii) furnish, at such time and in such manner as the Bank

may direct, any information in an accurate and
complete manner as the Bank may require to properly
discharge its functions under the Act;

(iii) comply with the Regulations, guidelines or directions

as the Bank may issue from time to time;

(iv) submit accurate periodic reports and returns to the

Bank;

(v) maintain the minimum capital requirements prescribed

by the Bank;

(vi) maintain a proper information management system to

facilitate compilation and submission of information to
the Bank;

(vii) accurately record all transactions relating to business

of money remittance;
(viii) remit funds to customers;

(ix) obtain the prior written approval of the Bank to own or

transfer shareholding of five percent share capital or to
change directorship in a money remittance operator;

(x) produce books, accounts, records, documents,

correspondence, statements, or other specified
information without any reason;

(xi) comply with the requirement that prohibits tipping off

a person suspected of money laundering that a
disclosure has been made or otherwise prejudicing an
investigation;

(b) conducting money remittance business through a proxy or

nominee;

(c) owning, transferring shareholding of ten percent share

capital or changing directorship in a money remittance
operator without obtaining the prior written approval of the
Bank;

(d) engaging a senior officer who has not been vetted, approved
and registered by the Bank;

(e) conducting business in a manner which in the view of the

Bank is unsafe or unsound;

(3) The Bank may, after reviewing all available information and
making a determination that a provision under subregulation (2) has
been contravened—
 Kenya Subsidiary Legislation, 2013 293

(a) notify the person or money remittance operator of its finding

and its intention to assess monetary penalties;

(b) grant the person or money remittance operator reasonable

time to rectify the violation;

(c) issue a person or a money remittance provider seven days

notice in writing requiring the person or money remittance
provider to show cause why a penalty should not be
imposed;

(4) Following the notification and expiration of the timeframe in

sub-regulation (3) (c) or sooner if advised by the money remittance
operator or a person of the correction of the violation, the Bank shall
instruct the money remittance operator or that person, in writing, of the
penalties assessed and the manner in which such monies shall be paid
to the Bank.

(5) A penalty prescribed under these regulations shall be paid to

the Bank by a money remittance operator or a person as the case may
be, within fourteen days from the date of service of the notice, unless
otherwise stated by the Bank in writing.

(6) Where a money remittance operator is required to pay a

penalty under these regulations and fails to pay a penalty within the
specified time, the Bank may recover the amounts due from the
security or proceeds of the security provided under regulations 7 (3) (b)
and 12 (4)(c).

(7) Where the Bank recovers any amount due on a penalty

from the security provided to the Bank, the money remittance operator
shall within thirty days of being notified by the Bank, raise the security
amount to the level required by the Bank.
(8) Where no payment is made or received under sub-
regulation (5), or where the security is not raised as provided in sub-
regulation (7), the Bank may revoke the licence of the money
remittance operator.
(9) Where the penalties under sub-regulation (4) are payable by
a person and the person fails to pay, that person shall be disqualified
from holding office in a money remittance operator.
(10) Where the Bank is not satisfied either by evidence provided
by a money remittance provider or a person, or by information obtained
by the Bank, that the violation has been rectified as directed, the Bank
may prescribe additional penalties not exceeding ten thousand shillings
in each case for each day or part thereof during which such
contravention continues.
(11) If the Bank is satisfied that the violation has been rectified,
the daily additional penalty of ten thousand shillings shall cease to
accrue and the Bank shall assess the aggregate penalty.
294294 Kenya Subsidiary Legislation, 2013

(12) Where any provision of these regulations imposes a penalty

on any money remittance operator or a person and, either the penalty or
part of the penalty remains unpaid, the unpaid amount of the penalty
shall constitute a civil debt due from a money remittance provider or a
person to the Bank.
(13) The Bank may—
(a) in addition to the provisions of sub-regulation (12), institute
civil proceedings against a money remittance operator or a
person for the recovery of the penalty; or
(b) direct that any part of the penalty which remains unpaid after
a particular period notified to the money remittance operator,
shall constitute a debt payable by the money remittance
operator.
44. (1) The Bank may suspend the licence of a money remittance Suspension and
revocation.
operator for such period as it may specify but not exceeding ninety
days if the money remittance operator fails to comply with the
provisions of these regulations or any conditions attached to the
licence.
(2) The Bank may revoke the licence of a money remittance
operator in cases where—
(a) without the written consent of the Bank , the money
remittance operator fails to conduct money remittance
business within twelve months of the date of the issue of the
licence;
(b) the money remittance operator is found to have ceased to
conduct the operations authorized by the licence;
(c) a company is incapable of existing in law or of carrying on
its operations or of meeting capital requirements or fulfilling
any other provisions of these regulations;
(d) the money remittance operator fails to pay the required
licence fees by the stipulated date;
(e) the beneficial owners of the money remittance operator, or
the money remittance operator itself, is convicted by any
court of competent jurisdiction, in Kenya or elsewhere, of an
offence related to the use or laundering, in any manner, of
illegal proceeds, or is an affiliate or subsidiary of a company
that has been so convicted, and such conviction is not
overturned on appeal;
(f) the money remittance operator has supplied the Bank with
false or misleading information as part of its application for a
licence, or during the course of operation;
(g) the money remittance operator is undercapitalized;
(h) the money remittance operator fails to pay a penalty as
directed by the Bank within fourteen days;
 Kenya Subsidiary Legislation, 2013 295

(i) the money remittance operator fails to rectify violations

within the specified time frame or persistently being non-
compliant with these regulations;
(j) the money remittance operator submits in writing a request
for the revocation of its licence;
(3) Where the Bank intends to revoke or suspend the licence of a
money remittance operator, the Bank shall immediately inform the
money remittance operator of its decision in writing.

(4) Before revoking or suspending licence, the Bank shall give

the money remittance operator not less than twenty one days notice in
writing and may consider any representations made in writing by the
money remittance operator within that period.

45. (1) A person who at the commencement of these Regulations, Transitional clause.
is carrying out money remittance business shall within six months from
commencement comply with the requirements of these Regulations or
cease to carry out such business.
(2) A person who fails to comply with the requirements of sub-
regulation (1) within the prescribed period, commits an offence and
shall, on conviction be liable to a fine not exceeding five hundred
thousand shillings, or to imprisonment for term not exceeding three
years, or to both as prescribed under section 33A (2) of the Central
Bank of Kenya Act. Cap 486

(3) Where a money remittance operator is licensed under these

Regulations, it shall at all times maintain a minimum core capital of not
less than ten million shillings before the commencement of operations
and increase the core capital to twenty million shillings by the thirty -
first day of December 2014.

(4) A foreign exchange bureau intending to engage in money

remittance business shall—
(a) make an application to the Bank for change of name,
(b) meet all the licensing requirements under these Regulations;
and
(c) surrender the licence for foreign exchange bureau business.
296296 Kenya Subsidiary Legislation, 2013

FIRST SCHEDULE (r.5)

APPLICATION FOR OR RENEWAL OF LICENCE TO TRANSACT MONEY
REMITTANCE BUSINESS—FORM/CBK /MRB/1
The application shall be addressed to the Director, Bank Supervision Department, Central
Bank of Kenya, P.O. Box 60000-00200 Nairobi,
Application (Tick as appropriate):
Grant of new Licence Renewal of Licence Year

Please use Block (Capitals) Letters

1. Name of Money Remittance Operator…………………………………………………
2. Physical and postal address of head office/ proposed new outlet:
(a) City/Town……………………………....................................................................
(b) L.R.No….................................................................................................................
(c) Street….………………….......................................................................................
(d) Building……………………………………...........................................................
(e) P.O Box No..………………………...........………...........…………….................
(f) Telephone Numbers.…………….……..………............…………..……………...
(g) E-mail Address……………………...……………...........………….………….....
3. Date of incorporation …………....….............................................................................
4. Certificate of incorporation No…………….……………………………………..........
5. Number and date of issue of previous licence ……………………….………………
6. Details of existing outlets:
Name of County City/Town Street Building Date
Outlet Opened
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
7. Particulars of shareholders:
Name Nationality Date of Amount of % of
acquisition shareholding shareholding
1.
2.
3.
 Kenya Subsidiary Legislation, 2013 297

Name Nationality Date of Amount of % of

acquisition shareholding shareholding
4.
5.
6.
7.
8. Particulars of directors:
Name Nationality Date of Level of
Appointment Education
1.
2.
3.
4.
5.
6.
7.
9. Particulars of the officers in the order of seniority:
Name Designation Nationality Date of
Appointment
1.
2.
3.
4.
5.
6.
7.
10. Declaration (by Director/Secretary):

I, the undersigned, hereby declare—

(a) THAT the particulars set out herein are true and correct to the best of my
knowledge and belief;

(b) THAT if licensed, I shall transact money remittance business in accordance with
the provisions of the Central Bank of Kenya Act, CAP 491 and of any
regulations, guidelines or directive as may from time to time be issued by the
Central Bank of Kenya.

Name……………………………...............................
Signature……………….......................................…...
Date………………………………….........................
298298 Kenya Subsidiary Legislation, 2013

SECOND SCHEDULE (r. 5(f), r 17(a))

SHAREHOLDERS’ DIRECTORS’ AND SENIOR OFFICERS’ FIT & PROPER

FORM—FORM/CBK/MRB/2

Criteria for determining professional and moral suitability of persons in control of a

money remittance business licensed under the Central Bank of Kenya Act, CAP 491
NB:
(a) Read the declaration on Section 6 below before completing this form.
(b) In case the space provided is inadequate, use additional paper.
1. NAME OF MONEY REMITTANCE OPERATOR……………………………………
2. PERSONAL INFORMATION
(a) Surname: ................................................................................................................ ..........
Other names: ....................................................................................................................
(b) Proposed position: …………………….……………………………………………......
(c) Previous names (if any) by which you have been known: ……………………..………
(d) Year and place of birth: ...................................................................................................
(e) Nationality and how acquired: ........................................................................................
(f) Personal Identification Number: ......................................................................................
(g) Identification card number and date of issue: .................................................................
(h) Passport number and date of issue: ………………………………………….................
(i) Postal address: ……………………………………….……………………....................
(j) Previous postal addresses (if any): ..................................................................................
(k) Physical address: .............................................................................................................
(l) Email address:........................................................................................................... ........
(m) Telephone number:
(a) Office.......................................................................................................................
(b) Mobile.....................................................................................................................
(n) Educational qualifications:..............................................................................................
(o) Professional qualifications and years obtained: ..............................................................
(p) Name(s) of your bankers during the last 5 years: ………………………………………
 Kenya Subsidiary Legislation, 2013 299

3. EMPLOYMENT/BUSINESS RECORD
Period Name of Positions held Responsibilities Reasons for
Employer/Business and dates leaving (where
and address applicable)

4. DESCRIPTION OF YOUR PAST AND CURRENT ACTIVITIES IN KENYA AND

ABROAD

4.1 SHAREHOLDING (DIRECTLY OWNED OR THROUGH NOMINESS)

Company’s Date of Amount of % of Past Remarks
Name incorporation shareholding shareholding shareholding
A B

A: Refers to date of sell, transfer, closure or surrender of shares

B: Refers to reasons for sell, transfer, closure or surrender

4.2 DIRECTORSHIP
Company’s Date of Executive or Position held in Past Remarks
Name appointment Non-Executive case of Executive Directorships
C D

C: Refers to date of retirement, resignation or dismissal

D: Refers to reasons for retirement, resignation or dismissal
300300 Kenya Subsidiary Legislation, 2013

4.3 PROFESSIONAL BODIES

Name of Membership No. Position held Past membership Remarks
body (if any)
E F

E: Refers to date of retirement, resignation or dismissal

F: Refers to reasons for retirement, resignation or dismissal
4.4 SOCIAL CLUBS
Name of Membership No. Position held Past club membership Remarks
club (if any)
G H

G: Refers to date of retirement, resignation or dismissal

H: Refers to reasons for retirement, resignation or dismissal
4.5 BORROWINGS
Name of Name of Type of Amount Date Terms Security Value of Current Remarks
borrower lending facility borrowed of of offer offered security outstanding
institution offer balance

*Borrower to indicate both individually and the company where he holds more than 5%
of the shareholding

5. QUESTIONNAIRE
5.1 Have you or any entity with which you are associated as director, shareholder or
manager, ever held or applied for a licence or equivalent authorization to carry on
 Kenya Subsidiary Legislation, 2013 301

any business activity in any country? If so, give particulars. If any such application
was rejected or withdrawn after it was made or any licence revoked, give particulars.
………………………………………...........................................................................
………………………………………...........................................................................
5.2 Have you at any time been convicted of any criminal offence in any jurisdiction? If
so, give particulars of the court in which you were convicted, the offence, the penalty
imposed and the date of conviction.
………………………………………..........................................................................
………………………………………...........................................................................
5.3 Have you, or any entity with which you have been involved, been censured,
disciplined, warned as to future conduct, or publicly criticized by any regulatory
authority or any professional body in any country? If so, give particulars.
………………………………………............................................................................
………………………………………............................................................................
5.4 Have you, or has any entity with which you are, or have been associated as a director,
shareholder or manager, been the subject of an investigation, in any country, by a
government department or agency, professional association or other regulatory
body? If so, give particulars.
………………………………………...........................................................................
………………………………………...........................................................................
.5 Have you, in any country, ever been dismissed from any office or employment, been
subject to disciplinary proceedings by your employer or barred from entry of any
profession or occupation? If so, give particulars.
……………………………………….......................................................................
……………………………………….......................................................................
5.6 Have you failed to satisfy any debt adjudged due and payable by you on order of
court, in any country, or have you made any compromise arrangement with your
creditors within the last ten years? If so, give particulars.
……………………………………............................................................................
………………………………………..........................................................................
5.7 Have you ever been declared bankrupt by a court in any country or has a bankruptcy
petition ever been served on you? If so, give particulars.
………………………………………......................................................................
……………………………………….........................................................................
5.8 Have you ever been held liable by a court, in any country, for any fraud or other
misconduct? If so, give particulars.
………………………………………........................................................................
………………………………………........................................................................
5.9 Has any entity with which you were associated as a director, shareholder or manager
in any country made any compromise or arrangement with its creditors, been wound
up or otherwise ceased business either while you were associated with it or within
one year after you ceased to be associated with it? If so, give particulars.
………………………………………..........................................................................
......………………………………………..................................................................
5.10 Are you presently, or do you, other than in a professional capacity, expect to be
engaged in any litigation in any country? If so, give particulars.
……………………………………….........................................................................
……………………………………….........................................................................
5.11 Indicate the names, addresses, telephone numbers, emails, and positions of three
persons of good standing who would be able to provide a reference on your
302302 Kenya Subsidiary Legislation, 2013

personal and professional integrity. The referees must not be related to you, and
should have known you for at least three years............................................................
……………………………………….........................................................................
………………………………………..........................................................................
5.12 Is there any additional information which you consider relevant for the consideration
of your suitability or otherwise for the position(s) held/to he held? The omission of
material facts may represent the provision of misleading information.
……………………………………….........................................................................
……………………………………….........................................................................

N.B. The information given in response to this questionnaire shall be kept confidential by
the supervisory authorities, except in cases provided for by law.

6. DECLARATION
I am aware that it is an offence to knowingly or recklessly provide any
information, which is false or misleading in connection with an application for a
licence.

I am also aware that omitting material information intentionally or un-intentionally

shall be construed to be an offence and may lead to rejection of my application.

I certify that the information given above is complete and accurate to the best of
my knowledge and that there are no other facts relevant to this application of
which the supervisory authority should be aware.

I undertake to inform the supervisory authority of any changes material to the

applications which arise while the application is under consideration.

NAME ........………................................ POSITION HELD.....................................

DATED........……......….AT......…….......THIS DAY OF........………….................

WITNESSED BEFORE ME:

SIGNED........…………..................................................................................... (Applicant)

COMMISSIONER FOR OATHS/MAGISTRATE

Name: …............................................................................................

Signature: ..........................................................................................

Address: ........…………....................................................................
 Kenya Subsidiary Legislation, 2013 303

THIRD SCHEDULE (r. 26 (2))

THE CENTRAL BANK OF KENYA ACT
(Cap. 491)
APPLICATION TO OPEN HEAD OFFICE PREMISES OR AN OUTLET FORM /
CBK /MRB/4
1. Name of the Money remittance operator……………………………...............................
2.Names/locations of proposed/existing premises and dates of establishment……..………
3.Proposed name of Head Office or outlet ………………………...………………………
4. (a) Name of the proposed location of Head-office or outlet ………………….................
(b) Postal address and telephone number(s) ………………….........……………............
(c) Physical address: - L.R.NO...................Building……...……..Street…………..
Town..................................................................................................
5. (a) Officers of the proposed Head- office or outlet……………………………………
(b) Number and designation of non-management staff………………………………….
6. Business hours …………………………………………..........................................……
7. Is the new place of business:-
(a) Self-owned? ……………Yes/No* …………
If yes, cost of purchase or construction……………(b) Leased? ………….........……

Yes/No* ………… If yes, terms of lease……………………….

8. Proposed date of commencing operations …………………………................................

9. Attach the following documents:
(a) A title deed or a signed lease agreement whichever is applicable, of the premises;
(b) Approvals by Relevant Authorities;
(c) An installation certificate and agreement from the security firm regarding physical
security of premises;
(d) Adequate covers for the following policies from licensed insurance companies
covering; Fire and other perils, Burglary and theft, Public liability, Fidelity,
Workmen’s compensation, Cash and valuables in transit, Cash and valuables in
premises, Motor vehicles in premises, Other assets (e.g. computer), Employers’
liability;
10. Declaration (by Director/Secretary):
I, the undersigned, hereby declare:
(a) THAT the particulars set out herein are true and correct to the best of my
knowledge and belief;
(b) THAT if licensed, I shall transact money remittance business in accordance with
the provisions of the Central Bank of Kenya Act and of any regulations,
304304 Kenya Subsidiary Legislation, 2013

guidelines or directive as may from time to time be issued by the Central Bank
of Kenya.
Name……………………………...............................

Signature……………….......................................…...

Date…………………………………........................

FOURTH SCHEDULE (r. 35)

PRESCRIBED FEES

1.The following are the prescribed fees for the various licences as outlined in the
table.

Type Fees (KSh.)

1. Annual licence fee per outlet 100,000
2. Application fee for a new licence 20,000
3. Application fee for a new outlet 10,000
4. Application fee for an agent 1,000
5. Annual renewal fee for an agent 1,000

2. Any fee payable under paragraph (1) shall be paid by bankers cheque payable
to the Bank or by any other means prescribed by the Bank.

3. The prescribed fees in paragraph (1) may be reviewed by the Bank from time to
time.

Made on the 11th April, 2013.

NJUGUNA NDUNG’U,
Governor, Central Bank of Kenya.

PRINTED AND PUBLISHED BY THE GOVERNMENT PRINTER, NAIROBI