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In the last few months, Nairobi has witnessed dramatic Cash in Transit (TIT) theft incidences that compare to scenes from Hollywood. A leading security company has so far lost an estimated KShs500 million in these occurrences, leaving many unable to comprehend the apparent desperation in stopping these losses.
Now a rival company has introduced a raft of technological solutions it says will minimise chances of theft of cash in transit.
KK Lodgit Limited (KKL), a recently created cash management business by KK Security (KK), one of the largest security companies in the region, says majority of incidences involving theft from CIT vehicles are usually perpetrated by staff working with the companies, supported by outside criminal forces and ineffective technology, which criminals have successfully exploited to their advantage.
With several billions of shillings transported each year and thousands of couriers using a variety of vehicles; the scale of Cash in Transit attacks in the country is now becoming a major concern.
Now KK Lodgit has introduced systems incorporating the ‘Smoke and Dye’ technology, which triggers the defacing of cash through the release of a dye when the cash is interfered with. The company’s Executive Director Mr James Omwando says the initiative to introduce the new technology, which uses smoke and dye to deface the currency and make it worthless, follows an amendment in the Central Bank of Kenya (CBK) Act, which allows for defacement of Kenya currency, an aspect that was considered unlawful prior to the amendment. However legislation is yet to be passed to make this act entirely legal.
“It is our belief that successful and secure CIT business is one that is people driven and supported by proven technology. As KK Lodgit, we have a set of technology solutions which ensure secure end to end carriage of cash and reduce risk,” said Mr Omwando. He said KK Lodgit has deployed GPS technology on all its CIT vehicles, which are fitted with remote immobilisation devices, panic buttons, Smokecloak – a glycol based smoke generator, and effective locking mechanisms.
Technology to reduce costs
Recently the government directed that the number of Administration Police escorting cash in transit be increased from three to four, which would push the cost of security firms by up to 25 percent. But Mr Omwando is optimistic the new technology will reduce the cost in the long term.
Firms are however expected to put in a substantial amount in initial investment for the ‘smoke and dye’ technology. Analysts estimate that the industry will spend an estimated KShs500 million to deploy use of these intelligence defacement devices (CDDs) in its currency transportation system. This amount excludes what is needed to secure dye and smoke technonogy for Automated Teller Machines (ATMs).
Speaking to journalists, while showcasing their ‘smoke and dye’ systems in Nairobi, Mr Omwando however warned that improving the command and control structures within the CIT companies is key to success in CIT business.
“The use of this technology (smoke and dye) will eliminate the police chase cars, leaving only the vehicle with the cash. This will reduce costs incurred by banks in transporting cash from one to another,” he said.
The key contributor to reducing the present rash of internally driven loss and theft incidents in the CIT sector has been said to be regular and repeated background vetting of all staff that have access to the cash in the system, improved command and control structures within the CIT companies, combined with the vehicle control satellite technologies available today and rigorous staff training.
Legislation gap harboring progress
The upsurge in robbery cases that has hit cash escort vans in Kenya, has send panic within the banking sector – the largest consumers of CIT services. Apart from banks, the burden of transporting cash is also shared with CIT firms.
Amendments to the CBK Act are contained in a Kenya Gazette notice No 148 published on November 21, 2008. The law allows CBK to register and issue a license to use or operate a cash defacement security device. However, it has yet to begin licensing these devices due to a number of setbacks. For instance, defaced currency will need to be replaced and regulations surrounding this are still undergoing legislative process.
Without a well managed and defined environment in which these devises are used, the possibility of the economy being affected by inadequate notes in circulation as a result of removal of bank notes due to defacement are real, say some industry players. In a meeting between CBK and stakeholders, the regulator indicated that it has moved to the next stage of forwarding new regulations to the State Law Office before its gazettement. Of particular interest to the CIT industry is the provision of procedures for use of cash defacement devices while on transit.
In the meantime, CBK has invited applications for licensing to the use of CDDS. This will be done in liaison with Kenya Bankers Association, Kenya Bureau of Standard, National Environmental Management Authority (NEMA), Chief Government chemist and the police to ensure that players have complied with all requirements.
Parliament will have to enact laws around the CBK regulations before the CIT industry begins to use CDDs in movement of cash.
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