Economy

Auditor-General questions CBK failure to pick directors

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Auditor-General Nancy Gathungu. PHOTO | LUCY WANJIRU | NMG

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Summary

  • Auditor-General  says the banking regulator has four non-executive directors despite the law demanding that President Uhuru Kenyatta appoints eight of the board members.
  • The board maintains full control over strategic, financial and operational issues of the CBK but is not involved in the conduct of day-to-day business as this is the responsibility given to the governor.

The Auditor-General Nancy Gathungu has raised concerns over Central Bank of Kenya’s legal breach operating with seven instead of 11 directors and the absence of a second deputy governor.

She said the banking regulator has four non-executive directors despite the law demanding that President Uhuru Kenyatta appoints eight of the board members.

Ms Gathungu raised the query in the audited books of the CBK for the year ending June 2020, adding that there were also gaps in the management of the apex bank, including a lack of a second deputy governor as set out in the law.

“The Central Bank Act provides that there shall be eight other non-executive directors of the board. During the year under review, the bank had in place five non-executive directors transacting business on its behalf,” she said.

“The Central Bank of Kenya Act states ‘There shall be two deputy governors who shall be appointed by the president through a transparent competitive process and with the approval of parliament’. During the year under review only one Deputy Governor was in office,” said Ms Gathungu.

The non-executive board members are Ravi Ruparel, Nelius Kariuki, Samson Cherutich and Rachel Dzombo. Ms Charity Kisotu who was appointed in November 2016 resigned in January last year reducing the number to four.

The other members are the chairman Mohammed Nyaoga, Treasury PS Julius Muia and CBK governor Patrick Njoroge.

The board maintains full control over strategic, financial and operational issues of the CBK but is not involved in the conduct of day-to-day business as this is the responsibility given to the governor.