NAIROBI, Kenya, Feb 17- The Cabinet has approved the privatisation of the Kenya Postal Savings Bank (Postbank of Kenya).
The Cabinet said on Thursday that Postbank, which is a subsidiary of the Postal Corporation of Kenya will be licensed and regulated by the Central Bank of Kenya under the Banking Act.
“Today’s cabinet meeting has approved conversion of the Kenya Postal Savings Bank to a limited liability company,” said the Cabinet in a statement.
The bank was incorporated in 1978 to mobilise savings for national development, but retained the agency services of the then Kenya Posts and Telecommunications and now its successor Postal Corporation of Kenya
The government has agreed to transfer 44 percent of its ownership in the bank to the Postal Corporation of Kenya, the cabinet further said.
However, no mention has been made as to how the remaining 56 percent will be dealt with.
Postbank of Kenya has for some times now urged the government to expand its mandate to enable it effectively compete in the financial services sector.
Currently its mandate has been to inculcate a savings culture among Kenyans, which it does through the various savings products it offers.
In the 2009/2010 Finance Bill Finance Minister Uhuru Kenyatta announced that Postbank would be able to deal in forex which saw the bank engage in discussions with the relevant government departments to give them the license to do this.
With its privatisation, the bank will now be able to offer all sorts of financial services; savings, credit and remittances.
The bank currently has 91 branches spread in all parts of Kenya, which will go a long way in enabling it to be competitive.
The local banking sector has not only being competitive but remained resilient in the midst of many financial challenges. The size of assets stood at Sh1.6 trillion by September 2010 while deposits of Sh1.3 trillion and profit before tax of Sh53.2 billion were registered during the same period.
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