Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-02-22 03:49:53
The Central Bank of Kenya (CBK) has introduced the draft Banking Penalties Regulations 2024, which are aimed at imposing heavy fines on financial institutions for a variety of offenses. The move is part of the CBK’s efforts to ensure compliance and accountability within the banking sector.
One of the key proposals in the draft regulations is the imposition of penalties on banks for certain actions, including opening, relocating, and closing banks and branches without prior approval from the CBK. According to the regulations, banks found guilty of this offense will face fines of up to Ksh2 million. Additionally, banks will be required to display audited financial statements in public at their respective branches.
The draft regulations also outline penalties for failure to keep records, with the proposed penalty set at Ksh20 million. Furthermore, the employment of senior directors of the banks without CBK’s approval will also be penalized heavily, with fines of up to Ksh5 million for institutions and Ksh1 million for individuals.
Institutions and individuals who become significant shareholders of a bank without certification from the CBK face fines of Ksh1 million for individuals and Ksh5 million for institutions. Additionally, non-compliance during inspections will attract a penalty of Ksh20 million.
The CBK has proposed a process for informing banks of their infringements and fines, with the banks given a window to respond before the penalty is imposed. Furthermore, the regulations propose a mechanism for institutions or individuals to request a review of the CBK’s decision if they are dissatisfied with it.
The CBK has also invited comments from the public on the proposed regulations, with a deadline for submission set for Monday, March 18. This is part of the CBK’s commitment to stakeholder engagement and transparency in the development of regulations that impact the banking sector.
Overall, the draft Banking Penalties Regulations 2024 represent the CBK’s commitment to strengthening regulatory oversight and promoting accountability within the banking sector. By imposing significant fines for various offenses, the CBK aims to incentivize compliance and deter non-compliance among financial institutions. The proposed penalties are designed to ensure that banks operate in accordance with regulatory requirements and contribute to the stability and integrity of the Kenyan financial system.
The introduction of these penalties underscores the CBK’s proactive approach to regulation and its focus on promoting a sound and resilient banking sector. It also reflects the CBK’s commitment to protecting the interests of consumers and other stakeholders in the financial system. The proposed penalties, if implemented, are expected to have a positive impact on the overall governance and risk management practices within the banking sector in Kenya.
Read the original article on Kenyans.co.ke
