Kenya: CBK Lines Up Three More Supervisory Colleges

Aug 20, 2014

The Central Bank will set up at least three additional supervision authorities by the end of this year as Kenyan lenders establish more and more cross-border operations.

The Central Bank will set up at least three additional supervision authorities by the end of this year as Kenyan lenders establish more and more cross-border operations.

Supervisory colleges
are structures dedicated to the supervision of a banking group with significant regional presence. The first was set up in 2012 for KCB Group, which has a presence across East Africa and South Soudan, and in 2013, two others were established for Equity Bank and Diamond Trust Bank.

These colleges became necessary as more Kenyan banks looked at expanding regionally: CBK counted 300 branches of Kenyan banks outside the country as of June 30.

CBK is therefore cooperating with the Reserve Bank of Malawi, Reserve Bank of Zimbabwe and Bank of Zambia to supervise these international groups. Memoranda of Understanding have been signed last year with the above central banks, as well as with the Reserve Bank of India, Banque Centrale du Congo, State Bank of Pakistan and the China Banking Regulatory Commission in 2012.

Supervisory colleges do not replace the regulatory power of the supervisors/regulators, but allow the better understanding of the structure of the banking groups and to harmonise the supervisory practices of the different authorities.