Kenya's Central Bank to push for new banking rules
Customers at an M-PESA service outlet in Nairobi. An audit by CBK found the service safe and reliable. Photo/FILE
The Central Bank of Kenya is pushing for policy guidelines that will enhance the regulatory framework of branchless banking.
This the bank says has been formed out of the increasing Information Communication and Technology based banking services that continues to be made available for customers.
According to Mr Cassian Nyanjua, an assistant director banking supervision at the bank, new regulations are also supposed to enhance the stability and safety.
“We will continue to develop appropriate policy, legal regulatory and supervisory regimes to govern the conduct of branchless banking, which involves use of ICT and ICT enabled services,” said Mr Nyanjwa
Internet banking and Mobile money transfer services are fast taking root in Kenya as a result of their efficiency and convenient usage.
However, their applications are still clouded by regulatory mishaps that might threaten their existence.
Speaking to journalists at the sides of an M-PESA and a Small and Micro Enterprises Programme (SMEP) on Monday, Mr Nyanjwa indicated that the proposals were already with the Attorney General.
“The proposals are have already been sent to the AG’s office and they are basically supposed to empower commercial banks to operate agencies,” he added
The current Banking Act only allows commercial banks to operate brick and mortar branches across the country.
The proposals will however allow them to set up agencies to act on their behalf but on an agreed level of transactions.
Present at the function, Safaricom chief executive Michael Joseph noted that the Mobile money banking service was at its critical moment.
“More and more people are embracing the service for use not just for money transfer but also pay bills and workers. The challenge therefore is for us to make it more stable and efficient,” he said
During the ceremony, Safaricom partnered with the SMEP to allow clients to the micro finance repay their loan through MPESA.
The service to be charged at discounted rate will see clients repay up to a maximum of Sh10,000.
“By embracing the transfer technology we are making our services easily accessible to the financially marginalised population in the country,” said Phyllis Mbungu, the institutions chief executive.
