Regulatory Alerts2012-11-05
Banking Circular No 9 of 2012 - Issuance of Revised Prudential Guidelines and Risk Management Guidelines
The Central Bank of Kenya has revised its Prudential Guidelines and Risk Management Guidelines, which will be effective from January 1, 2013. This update is in response to developments within the national, regional, and global arenas. The revisions aim to strengthen the financial system and align the guidelines with current market practices. These new guidelines replace previous versions issued in 2005 and will be enforced under Section 33(4) of the Banking Act. Institutions that fail to adhere to these guidelines may face remedial actions as specified within the legislation and accompanying regulations.
BANKI CENTRAL KUU YA BANK OF KENYA KENYA Haile Selassic Avenue P. O. Box 60000 - 00200 Nairobi, Kenya Telephone: 2860000, Fax: 340192 BANKING CIRCULAR NO. 9 OF 2012 TO: ALL CHIEF EXECUTIVES OF COMMERCIAL BANKS, MORTGAGE FINANCE COMPANIES AND CHIEF REPRESENTATIVE OFFICERS OF AUTHORISED REPRESENTATIVE OFFICES IN KENYA OF FOREIGN INSTITUTIONS
Issuance Of Revised Prudential Guidelines And Risk Management Guidelines
Pursuant to its mandate of fostering the liquidity, solvency and proper functioning of a stable market-based financial system, the Central Bank of Kenya has conducted a comprehensive review of the Prudential Guidelines and Risk Management Guidelines currently in use. The review has been necessitated by developments in the national, regional and global arenas and the need to proactively strengthen the regulatory framework for banks and other institutions licensed pursuant to the Banking Act.
The purpose of this Circular is therefore to: a) lssue the revised Prudential Guidelines to all commercial banks, mortgage finance companies, non - bank financial institutions and Representative Offices in Kenya of foreign institutions and advise that the Guidelines will be effective from I↑ January, 2013 thereby replacing the current Prudential Guidelines issued pursuant to Banking Circular No. I I of 2005. The Prudential Guidelines can be accessed on the Central Bank of Kenya website http/www.centralbank.go.ke.
b) Issue the revised Risk Management Guidelines (RMGs), which take effect from 1* January 2013 thereby replacing the current Risk Management Guidelines issued pursuant to Banking Circular No. I I of 2005. The Risk Management Guidelines can be accessed on the Central Bank of Kenya website http/www.centralbank.go.ke.
The above Guidelines are issued under section 33(4) of the Banking Act, and all institutions should note that a breach of any of the Guidelines attracts remedial actions as specified under the Banking Act and Regulations made thereunder.
TOR BANK SUPERVISION 5th November 2012 Cc. Mr. Habil Olaka Chief Executive Officer