Banking Industry

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The banking industry in Kenya is governed by the Companies Act, the Banking Act, the Central Bank of Kenya Act and the various prudential guidelines issued by the Central Bank of Kenya (CBK). The banking sector was liberalized in 1995 and exchange controls lifted.

The CBK, which falls under the Minister for Finance docket, is responsible for formulating and implementing monetary policy and fostering the liquidity, solvency and proper functioning of the financial system.

As at December 2008 there were forty-six banking and non-bank institutions, fifteen microfinance institutions and one hundred and nine foreign exchange bureaus.

The banks have come together under the Kenya Bankers Association (KBA), which serves as a lobby for the banking sector’s interests. The KBA serves a forum to address issues affecting members.

Key issues facing the banking industry

The main challenges facing the Banking sector today include:

  • New regulations; For instance, the Finance Act 2008, which took effect on 1 January 2009 requires banks and mortgage firms to build a minimum core capital of KShs 1 billion by December 2012. This requirement, its hoped, will help transform small banks into more stable organizations. The implementation of this requirement poses a challenge to some of the existing banks and they may be forced to merge in order to comply.
  • Global financial crisis experienced in late 2008 is expected to affect the banking industry in Kenya especially in regard to deposits mobilization, reduction in trade volumes and the performance of assets.
  • Others include declining interest margins

The role of Wamira & Associates in the banking industry

Wamira & Associates has extensive experience in serving the Banking sector in the African region and in Kenya in particular. Through our involvement in a large number of audit and non-audit assignments, including strategic and regulatory initiatives that influence the future of the sector, we have developed an in-depth knowledge of the sector which we apply to all our client relationships. WAA is involved with the CBK, the Kenya Bankers Association and a number of the major players.