Regulatory Alerts2015-12-14
Banking Circular No 13 of 2015 - Compliance with Sections 4 and 9A of Banking Act - Vetting of Directors and Senior Officers
The Central Bank of Kenya (CBK) has expressed concern over institutions appointing directors and senior officers before they are vetted and certified by the bank, which is a mandatory requirement according to Section 9A(1) of the Banking Act. Violations will result in penalties including disqualification from the banking sector, as directed by Director of Bank Supervision Gerald Nyaoma.
BANKI KUU YA KENYA CENTRAL BANK OF KENYA Haile Selassie Avenue P.O. Box 60000-00200 Nairobi, Kenya Telephone: 2860000, Fax: 340192 14th December 2015 BANKING CIRCULAR NO. 13 OF 2015 TO: ALL CHIEF EXECUTIVES OF COMMERCIAL BANKS AND MORTGAGE FINANCE COMPANIES COMPLIANCE WITH SECTION 4 AND SECTION 9A OF THE BANKING ACT - VETTING OF DIRECTORS AND SENIOR OFFICERS The Central Bank has noted with concern the tendency of institutions to appoint directors and senior officers before they are vetted and certified by the Central Bank of Kenya (CBK).
Your attention is drawn to the mandatory requirement of Section 9A(1) of the Banking Act which obliges institutions to ensure that no person is appointed or elected as a director or senior officer unless the Central Bank has certified the person as fit and proper to manage or control the institution. In this regard therefore, the Central Bank hereby directs all institutions to strictly comply with the requirements of Section 9A of the Banking Act and all other provisions of the law, regulations and Prudential Guidelines.
Violation of this requirement will attract the requisite penalty as prescribed in the law, including disqualifying the person concerned from working in the banking sector.
GERALD NYAOMA DIRECTOR, BANK SUPERVISION Mr. Habil Olaka Chief Executive Officer Kenya Bankers Association International Life House Mama Ngina Street Nairobi Cc.