UK, South Sudan & US Among Top Destinations for Physical Cash from Kenyan Banks – CBK Report

The United Kingdom, United States, and South Sudan are among the leading destinations where Kenyan commercial banks are transporting physical cash, according to a new report by the Central Bank of Kenya (CBK).

The “Survey on Cross-Border Movement of Cash,” released on Wednesday, July 2, reveals that 15 commercial banks—representing 39.4% of licensed banks in Kenya—engaged in cross-border cash transfers.

The CBK notes that the primary reasons behind this physical movement of cash include the repatriation of foreign currency and the need to meet liquidity demands of foreign subsidiaries, which helps enhance operational efficiency.

According to the findings, customer deposits from local bank branches were the primary source of the transported cash. Additional sources include group subsidiaries, currency exchange agencies, and central banks of other countries.

The report shows that the UK accounted for 42% of the total cash outflows, followed by the US (15%), Switzerland (12%), and Germany (4%). Regionally, South Sudan received 15% of the cash, while the Democratic Republic of Congo (DRC) accounted for 8%.

The currencies most commonly moved across borders were the US Dollar, Euro, and British Pound.

Financial services companies specialising in cross-border payments and forex emerged as the main recipients of this cash, followed by individual bank customers, group subsidiaries, and foreign correspondent banks.

While the CBK did not disclose the exact amount of money transported, the sums are believed to be in the billions.

To verify the legitimacy of cash movement, banks reportedly used Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols. They also employed counterfeit money detection tools sourced from globally licensed currency suppliers and obtained regulatory approvals from origin countries.

However, the report revealed that 67% of banks experienced at least one case of irregularity, such as undeclared cash or attempted smuggling. Despite this, the banks noted such instances were rare.

Among the main challenges faced were lack of adequate technological solutions and limited cooperation from clients or correspondent institutions.

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UK, South Sudan & US Among Top Destinations for Physical Cash from Kenyan Banks – CBK Report