NAIROBI, Kenya, Feb 20 – The Central Bank of Kenya (CBK) is vetting directors of banking institutions and senior managers afresh to weed out people with questionable integrity or conflicts of interest.
CBK chairman Mohamed Nyaoga says the re-vetting has been necessitated by recent bank failures that threatened to crush the confidence in Kenya’s banking system.
According to Nyaoga fresh vetting, backed with strengthening of banks’ corporate governance structures, would ensure holders of board and management play their roles effectively.
“Most of the banking problems we have had were related to weak corporate governance perpetuated through internal fraud, CBK has put in place stronger governance measures, among them re-vetting of directors and senior managers when they are under any disciplinary action or for any violation of the law or suspected malpractices,” states Nyaoga.
The most recent bank failures in the last three years include Dubai Bank, Chase Bank and Imperial Bank.
Chase Bank was revived almost immediately while Imperial Bank, where Sh42 billion was lost, is still under receivership.
Dubai Bank was liquidated.