CBK Suffers As Court Suspends Charges For Mobile Money And Bank Transfers
This comes pending the determination of a case filed by...
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The High Court has issued temporary orders suspending the reintroduction of charges for transactions between mobile money and bank accounts.
Justice Mugure Thande ordered the telecommunications companies as well as the Central Bank of Kenya (CBK) to stop the reintroduction of the charges which took effect on January 1, 2023.
"The applicant contends that his rights and the rights of other members of the public have been violated, infringed and continue to be threatened by the 1st respondent herein and the Government of Kenya in view of the directive issued by the Intended 3rd Respondent on December 6, 2022," court documents read in part.
CBK Governor Patrick Njoroge. /FILE
This comes pending the determination of a case filed by Activist Moses Wafula who claimed that President William Ruto's government made blunders in the reintroduction process.
He argued that mobile money service providers will worsen the economic situation of Kenyans who are already struggling to recover from the COVID-19 pandemic.
"That, if the Banks continue riding on this Paybill infrastructure, making money from members of the public, then in the event that this honourable court finds this paybill platform in contravention of the constitution and various statutory provisions, the impact will be higher; more funds from the members of the public would have been lost and it may be a lot more difficult to ask the banks to refund such funds collected from the members of the public," Wafula argued.
The matter has been scheduled for mention on January 23, 2023, when all parties have been ordered to appear. This includes a local telco, the Attorney General, CBK, the Treasury Cabinet Secretary and the Competition Authority of Kenya, who were mentioned as respondents.
The respondents were also given until January 20, 2023, to file their responses, which will allow the petitioners time to peruse the documents.
In a statement on Tuesday, December 6, CBK explained that the charges were reintroduced upon consultations with the financial institutions and banks.
The charges were waived on March 16, 2020, as part of the emergency measures to facilitate the use of mobile money in the context of the COVID-19 (Coronavirus) pandemic. The new charges were however significantly lower than those that applied before and will apply after January 1, 2023.
"The revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by on average up to 61 per cent, and mobile money wallet to bank account by on average up to 47 per cent. Pricing Principles were issued by the CBK on December 17, 2020, as the guiding framework for setting tariffs and charges for mobile money services. The Pricing Principles relate to; customer centricity, transparency and disclosure, fairness and equity, choice and competition, and affordability.
"Tariffs for paybills that are used to collect and disburse funds by businesses, companies, and institutions such as schools, utilities, etc, will be reduced by on average 50 per cent," CBK announced.
The bank regulator added that charges levied by banks for bank-to-mobile money transactions were to be reduced by on average 45 per cent.
The revised charges for bank-to-wallet and wallet-to-bank transactions would be announced by respective financial institutions, which had stealthily introduced a 20 per cent excise tax to their customers, with some of them notifying the customers of the new changes.
"Dear Customer, we wish to advise that following the lifting of Covid-19 relief measures on mobile transaction fees by the CBK, effective January 1, 2023, the usual mobile money transfer fees will apply on transfers from account to mobile money. The charges range from Ksh11 - Ksh70 for transactions above Ksh100 plus 20 per cent excise duty,” read a text message from a local bank.
