In Summary
  • A spot check at various ATMs in Nairobi’s CBD showed that a number of banks were yet to configure their machines to only dispense the new currency notes.
  • Some ATMs are even dispensing new Sh1,000 notes of the old currency to the confusion of ATM customers.
  • But banks still argue that the Sh1,000 note is still legal tender and there is nothing to worry about.
  • Kenya has about 1,700 ATMs, 780 commercial bank branches and 66,000 bank agents countrywide.

It’s a race against time for banks to reconfigure their cash dispensing machines ahead of the October 1 demonetisation of the Sh1,000 note.

Commercial banks are still dispensing the old note to customers more than a month after the Central Bank announced it was withdrawing the currency from circulation.

A spot check at various automated teller machines (ATMs) in Nairobi’s Central Business District showed that a number of banks were yet to configure their machines to dispense the new currency notes.

Some of the old generation Sh1,000 notes being dispensed are new, with consecutive serial numbers, suggesting that they are being dispensed for the first time.

NEW NOTES
Various establishments with parking machines are also not yet accepting the new notes five weeks into the demonetisation process, forcing motorists to find other ways of paying for parking services.

The Central Bank of Kenya (CBK), caught the country by surprise during the June 1 Madaraka Day celebrations, when it announced that it was withdrawing the Sh1,000 notes in a bid to counter counterfeits and money laundering.

Days after the announcement, commercial banks announced that they had started configuring their ATMs to start dispensing the new currency.

It was expected that once the banks configured their ATMs, they would only be dispensing the new notes to speed up the currency replacement process, returning the old ones to the CBK.
But banks still argue that the Sh1,000 note is still legal tender and there is nothing to worry about.

The Kenya Bankers Association (KBA) — the industry lobby that speaks for banks — said early this month that its members were reconfiguring teller machines and currency counters as part of the demonetisation exercise.

Kenya has about 1,700 ATMs, 780 commercial bank branches and 66,000 bank agents countrywide.

DISRUPTION

“We anticipate banks will have a structured replacement program that will ensure minimal disruption of regular services,” KBA spokesperson Nuru Mugambi said in an earlier statement.

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