Banks Hit By Acute Shortage of New Generational Notes

There is an acute shortage of the new currency bank notes and the Central Bank of Kenya (CBK) has remained silent on the matter.

According to bank officials, they have been experiencing the new currency notes shortage for some time now, soon after configuring their Automated Teller Machines (ATMs), and have been forced to go back to issuing the old bank notes due to the silence of the CBK.

Despite the shortage of the new notes, the Kenya Banks Association (KBA) chief executive, Mr. Habil Olaka says that since the old notes are still a legal tender, the banks will continue issuing them as they wait for the shortage problem to be sorted out.

“Nothing stops the bank from dispensing the old notes which in fact are still a legal tender if there is a shortage,” said Mr. Olaka.

He added that by August and September, the problem will have been sorted out and the new currency notes will be fully in circulation.

He also notes that the fact that banks are back to issuing the old notes means that some of the money that had been withdrawn from the market is being returned into circulation.

The transition from old to new currency bank notes was an announcement that caught Kenyans by surprise on June 1 as the President officially unveiled the new currency during the Madaraka celebrations.

The CBK had announced that by October 1, the old 1000-shilling note would cease to be a legal tender, and made it clear that they had no intentions of changing the dates set.

They said they had given those with illegally acquired money four months, from the date of the unveiling of the new currency notes, to spend the money before it is officially illegal.

Changing of currency has been done before in countries such as India, Ghana, Nigeria, Pakistan, United Kingdom and Zimbabwe which is the only African country that partially succeeded as it went for the US dollar.