CBK to enhance scrutiny of bank directors, senior managers

CBK to enhance scrutiny of bank directors, senior managers

Bank directors are expected to be placed under further security by the banking regulator as part of efforts to restore confidence in the sector.

The Central Bank of Kenya (CBK) plans to vet directors and senior managers to get rid of those with questionable integrity.

CBK Chairman Mohammed Nyaoga said on Friday that fresh vetting, backed with strengthening of banks’ corporate governance structures, would ensure holders of board and management play their roles effectively.

“Most of the banking problems we have had were related to weak corporate governance perpetuated through internal fraud. CBK has put in place stronger governance measures, among them re-vetting of directors and senior managers when they are under any disciplinary action or for any violation of the law or suspected malpractices,” Mr Nyaoga said while presiding over the opening of the Centre for Corporate Governance Alumni Grand Reunion.

The last two years has seen greater scrutiny placed on the banking sector over poor management.

Dubai Bank, Imperial Bank and Chase Bank were all placed under receivership in the span of nine months.

Banks have also had to be more meticulous in their financial reporting after the regulator poked holes over the soundness of financial reports.

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