NAIROBI, Kenya, Apr 21 – The Kenya Bankers Association (KBA) has announced plan to introduce a new self regulatory framework by the end of June this year aimed at enhancing governance in the banking sector.
The association’s CEO Habil Olaka says the new framework to be governed by KBA will see introduction of punitive measures against banks which do not adhere to the rules.
“Once we have the self regulatory framework, we will then have a structure in which we can take tough measures against a member who does not abide by the code; and that can be, at the extreme, expulsion of a member,” Olaka said on Thursday.
He was speaking when the association signed onto the Code of Ethics for Business in Kenya, which will guide in the formulation of the new regulatory framework.
The framework is expected to be adopted by KBA member banks during its Annual General Meeting (AGM) to be held in June 2016.
In the wake of the current financial developments, he said, the strengthening of consumer protection and winning their trust is paramount, especially after the recent shakeup in the financial sector which saw at least three banks collapse.
“Auditors have upped their game; the Central Bank of Kenya has stood tough; so even banks have to up their game. There is no room for lack of governance and ethical business. Early in the year, CBK Governor said that 2016 is the year of transition. It is time for banks to report their actual balance sheets which show the same picture on the ground,” Olaka said.
KBA now joins other institutions and companies in signing onto the private sector Code of Ethics that seeks to enhance an organisation’s ethical standards and business conduct.
Similar to other business membership organisations within the Kenya Private Sector Alliance (KEPSA) that advocate for ethical standards across their networks, KBA is now expected to lead in the adoption of the standards across its member banks.
“The business environment today demands greater corporate accountability and transparency. We commend KBA for taking this step and committing to lead a culture change among its members,” KEPSA Chief Executive Carole Kariuki noted.