CENTRAL BANK OF KENYA
Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
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Serena Hotel, Nairobi
December 20, 2010

Mr. Rajiv Bakshi, Chairman, Bank of Baroda (Kenya) Ltd;
Mr. Arun Shrivastava, Managing Director Bank of Baroda (K);
Board Members of Bank of Baroda (Kenya) here present;
Management and staff of Bank of Baroda (Kenya);
Distinguished Guests;
Ladies and Gentlemen:
1. I am very delighted to join you this evening for the official launch of
Bank of Baroda’s Transaction-Based E-Banking product. I am
informed that this new product will enable the institution to serve its
customers more conveniently by providing them with a fast, reliable
and secure way of conducting various financial transactions.
2. Ladies and Gentlemen, allow me first to commend the board,
management and staff Bank of Baroda (Kenya) for the introduction
of this new product that will enhance service delivery to its
customers. The launch of Transaction-based E-Banking demonstrates
the bank’s commitment to financial innovation and to use the
technological platform to provide services to your customers costeffectively.
3. The product being launched today is expected to play a significant
role in expanding access to affordable financial services by the

general public as it will ultimately result in reduced banking costs to
the bank’s customers. With advancement in technologies, public
awareness and ease of use, e-banking has become a preferred
mode of banking rather than an alternate channel.
4. It is noteworthy that since its local incorporation in September 1992,
the bank has progressively grown its branch network to 10 branches.
as at
I also note that October 2010, the bank had an impressive
asset portfolio of Kshs.31 billion and customer deposits of Ksh.23
billion, supported by a strong capital base of Ksh.2.6 billion. This
indeed shows the level of confidence that the board and the
management of Bank of Baroda (Kenya) have in the Kenyan
.
Market
5. Ladies and Gentlemen, I am encouraged by the way the local
banking sector is embracing technology and demystifying the mobile
and internet banking services. The rolling out of such innovative
products will immensely contribute in deepening the financial sector
and thus support the country’s vision 2030. It is through financial
deepening that a majority of the Kenyan population will access
financial services conveniently and affordably.
6. The Central Bank of Kenya in partnership with the banking sector, is
currently focusing on initiatives aimed at reducing costs of doing

business for banks with the primary aim of bringing down costs of
financial services. In addition to developing innovative products, the
other major initiative towards cost reduction and financial inclusion has
been the introduction of Agent Banking. The CBK has so far
licensed four banks to carry out agent banking business and
approved 8,809 specific agents since the roll out in May 2010. The
rollout of the agent banking model is mainly aimed at addressing the
challenges of high transaction costs arising from the lack of proximity
of financial services and putting up brick and mortar branches where
they may not be economical in all the corners where customers are
to be found.
7. According to the FinAccess National Survey (June, 2009), only
23% percent of the country’s population aged above 18 years are
banked and therefore expanding basic financial services presents a
tremendous potential in lifting the majority of the population out of
poverty and hence better lives. One of the major impediments to
providing financial services to the poor has been the high cost
inherent in the traditional banking methods. The developments in
mobile and internet based banking services have enabled the
provision of financial services on a timely basis, at affordable prices
and solved the physical distances constraints.
8. Ladies and Gentlemen, The Monetary Policy Committee (MPC) in its
latest press release in November 2010 noted the significant and

emerging role being played by medium sized banks in accelerating
growth mainly benefiting small and medium sized enterprises through
expansion of credit and by revising their rates downwards. We do
anticipate that you are in this league so that you can spearhead
reduction in interest rates to benefit your customers and increase
your market share.
9. Finally, let me reiterate that the Central Bank will continue to
facilitate an environment that allows for a diverse range of financial
services providers to thrive and compete. Further, it will pursue better
regulation as opposed to more regulation so as to create room for
more innovations by financial institutions and also be ready with
effective tools to deal with any system vulnerabilities and emerging
risks.
10. With these few remarks ladies and gentlemen, it is now my honour
and privilege to declare the E-Banking product for Bank of Baroda
(Kenya) officially launched and wish the bank continued prosperity in
the years to come.
Thank You