Small banks have felt the pinch of the troubles of medium-sized banks three years ago seen in the flight of top savers in their hundreds of thousands in the past three years, according to the Central Bank of Kenya data.
Banking sources indicate that the wealthy were not at ease gambling with their hard-earned money in unstable banks, leading to the rush to find safe havens in bigger banks.
However, the Kenya Deposit Insurance Corporation CEO says the agency and the CBK were working to strengthen the tools used in identifying the struggling lenders to firm them up before they collapse. However, the KDIC assurance comes against the backdrop of the CBK warning 11 banks last year for flouting the rules of core capital, which may reveal that even after the three banks were placed in receivership in 2016, more troubles were lurking.
We urge the deposits insurer and the CBK to hasten the revamp of the monitoring tools to ensure the banks remain in business while the savers and other customers are not disadvantaged in any way due to missteps that are avoidable.
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