NAIROBI, Kenya — The Central Bank of Kenya (CBK) has clarified that older series Sh500 banknotes remain legal tender, urging traders and the public to accept them amid growing confusion and rejection in the market.
The clarification follows a viral complaint by a businesswoman who said customers were refusing to accept the older Sh500 note, sparking widespread uncertainty over the validity of older currency in circulation.
In response, CBK advised traders facing resistance from customers to either educate them or exchange the notes at commercial banks for newer series currency.
“To businesses that encounter customers who do not want to interact with old banknotes, talk to them and make them understand that these still remain legal tender. If it becomes a big problem, then visit the nearest bank and get the new generation banknotes,” a CBK official said.
The regulator emphasized that all Sh500 notes—both old and new series—are valid and should be accepted for transactions.
CBK reiterated that only the old Sh1,000 note was demonetised in 2019 as part of a broader currency reform aimed at curbing illicit financial flows.
No other denominations, including Sh500 and Sh200, were withdrawn.
The confusion has been fueled by reluctance among customers and suppliers to accept older notes, with some fearing they may be rejected further down the transaction chain.
In the viral video, the trader lamented that even suppliers declined the notes, effectively disrupting business operations.
CBK explained that while there is no fixed timeline for withdrawing older series notes, they are being phased out gradually through the banking system.
Once deposited, the old notes are not reissued into circulation. Instead, banks release newer series currency, allowing the older notes to naturally diminish over time.
“Once we receive the old series notes, we are not releasing them back to the market again. Instead, we release new notes. Though there is no timeline to entirely remove them, it will happen gradually,” the official added.
The central bank encouraged Kenyans holding older notes to continue using them in transactions or deposit them in banks to facilitate the transition process.
Authorities are now urging the public to familiarise themselves with valid Kenyan currency to avoid rejecting legitimate banknotes and ensure smooth economic activity.
