Anyone seeking to exchange more than one million shillings of the new notes will have to be approved by the Central Bank.
CBK has directed commercial banks to seek its express approval before allowing any transaction above a million shillings.
In new tough guidelines that seek to deter money laundering, anyone seeking to deposit or withdraw more than one million shillings must now have a registered bank account with a local bank.
CBK has further directed commercial banks not to exchange the old notes with anyone without an active bank account.
Banks will also have to account verification exercise to ensure the authenticity of the account holder.
CBK has also urged commercial banks to reconfigure their automated teller machines and currency counters to allow them to dispense the new currency with ease.
ATMs will also not be allowed to exchange the old notes for larger amounts.
Apart from commercial banks and other licensed lenders, the central bank has also opened currency exchange centres in all its regional currency centres here in Nairobi, Mombasa, Kisumu, Eldoret, Meru, Nakuru and Nyeri and Kisii.
CBK says commercial banks that fail to enforce the requirements will face serious sanctions.
On Saturday central bank announced the phasing out of the old 1000 notes with effect from the 1st of October.