By O’Brien Kimani
The Central Bank of Kenya has frozen the issuance of new licenses to new banks as it moves to streamline its operations.
The bank says in a statement that no bank will be issued with a new license but the moratorium does not affect mergers or acquisitions.
The move is seen as an attempt by the newly appointed Central Bank Governor Patrick Njoroge to rein into the affairs of the regulator after a series of mal-practices within the sector where CBK has come under sharp criticism.
Central Bank of Kenya has come under severe criticism following the collapse of two banks this year.
Officers from the banks supervision department have been accused of colluding with directors of commercial banks to cover up cases of mal-practices with their banks.
So far two banks, Dubai Bank Kenya limited and Imperial bank have been placed under receivership putting at risk billions of investors’ funds.
Newly appointed CBK governor Patrick Njoroge last month said some officers from the bank’s supervision department were being probed for corruption related cases.
On Wednesday the CBK has put on hold licensing of new commercial banks in the country until further notice.
A statement from the bank says that the moratorium does not apply to cases relating to resolution amalgamation and acquisition of banks.
It is said there are more than 10 financial institutions mostly SACCOS that are in the process of applying for licenses to operate as commercial banks. Unaitas Sacco formerly known as the Muramati Sacco had in 2013 said that it was targeting to apply for a license in two years’ time to transform into a commercial bank after a recapitalization process.
Officers from the bank’s communication department have said they are working on a comprehensive report on the matter following our queries on the matter.
Kenya has 43 commercial banks and hundreds of savings and credit organizations