A new bill is seeking to establish a new professional body that will be responsible for training, registering and licensing of bankers.
The bill by Kesses Member of Parliament Julius Rutto dubbed the Institute of Bankers Bill, 2024 seeks to create a new entity dedicated to the regulation training and certification of bankers.
The proposed entity will be called Institute of Bankers. It will co-exist alongside the Kenya Bankers Association (KBA) which serves as the umbrella organisation for commercial banks and the Kenya Institute of Bankers (KIB) which offers various certifications for the industry.
“Currently, Kenya lacks a formal, centralised professional body dedicated specifically to the regulation, training and certification of bankers. As a result, professional development in the banking sector is often managed by individual banks or through industry associations,” reads part of the bill.
The creation of the new institute is expected to enhance professional standards in the industry, increase regulation and oversight, promote banking education, public confidence and support the sector’s growth. The body is expected to have a governing council that includes a chairperson and seven other members.
The entity will also feature a banker’s examination body comprising nine nominated members and will primarily set and regulate the syllabus for the banker’s professional examinations; preparing and conducting these exams, making rules regarding the exams and prescribing the fees.
The banking sector is primarily regulated by the Central Bank of Kenya (CBK) which supervises commercial banks, microfinance banks and other financial institutions, enforcing regulations that maintain sound banking practices and protect depositors’ interests.
CBK does not regulate individual banking professionals but has a role in vetting top executives before they are hired.
KIB meanwhile is a professional body under the Societies Act but is not backed by specific legislation.
Established in 1979, the entity was created to promote the professional development of bankers in Kenya by offering training and certification programmes to enhance the skills and knowledge of banking professionals.
KBA on the other hand advocates for the sector’s interests and fosters collaboration among banks to enhance service delivery and financial inclusion.
The number of bank employees in Kenya hit 84,280 at the end of last year from 82,371 in 2022 as the industry’s total assets rose to Sh7.6 trillion from Sh6.5 trillion previously according to CBK data. The industry’s assets include Sh3.7 trillion in net loans and advances to customers.
According to KBA, the industry is expected to expand further this year from key developments including the direction of interest rates, exchange rate and growth.
“The growth of the banking sector in 2024 will be driven by four major developments including global growth trajectories which impacts Kenya through trade and financial linkages, with exchange rate movements and asset repricing amplifying these effects,” KBA noted.
The direction of monetary and fiscal policy is also expected to impact the profitability of the industry with government financing risks as headwinds to growth.
