Uhuru backs CBK governor's crackdown on rogue banks

Central Bank of Kenya Governor Patrick Njoroge. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • President Kenyatta said Central Bank Governor Patrick Njoroge was in order to put struggling banks under receivership to safeguard depositors’ money.
  • So far, three banks have failed the CBK test since Dr Njoroge took over mid last year; two are under receivership while another was liquidated.
  • The President also asked Treasury Cabinet Secretary Henry Rotich to ensure depositors are protected from non-compliant banks.

President Uhuru Kenyatta has expressed his support on the ongoing crackdown on rogue banks, saying the financial sector must be strengthened to prevent it from crumbling.

He said the sector was not in crisis but needed cleaning up to cure it from non-compliant lenders.

Speaking on Thursday night in Berlin, Germany, where he has been on a state visit, the President said Central Bank Governor Patrick Njoroge was in order to put struggling banks under receivership to safeguard depositors’ money.

So far, three banks have failed the CBK test since Dr Njoroge took over mid last year; two are under receivership while another was liquidated.

“I am not worried about the banking sector. I support the governor on this. He is saying we must strengthen and remove the weaknesses in the financial sector,” said the President.

FINANCIAL OBLIGATIONS

He spoke on the same day Chase Bank was put under receivership following massive withdrawals that put it under duress and unable to meet its financial obligations.

It became the third bank under nine months to fall short of its financial expectations, after Imperial Bank and Dubai Bank.

The former is already in receivership and is being managed by the Kenya Deposit Insurance Corporation while the latter wound up.

“I believe the governor is doing the best for the sector. The banks must follow the law. The cleaning up does not mean it is falling down. We must strengthen the financial sector as we move forward,” added the Head of State.

NON-COMPLIANT BANKS

The President also asked Treasury Cabinet Secretary Henry Rotich to ensure depositors are protected from non-compliant banks.

“I have emphasised to my Treasury Cabinet Secretary to ensure depositors, especially small depositors, are protected. This is the most important thing, I think. All depositors must remain protected,” he said.