Njuguna Ndung'u: Ongoing developments in the Kenyan financial sector
Remarks by Prof Njuguna Ndung'u, Governor of the Central Bank of Kenya, at the Kenya
Institute of Bankers National Banking & Finance Conference, Mombasa, 3 July 2012.
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Hon. Robinson Njeru Githae, Minister for Finance;
Hon. Kenneth Marende, Speaker of the National Assembly;
Hon. Justice Willy Mutunga, Chief Justice of the Republic of Kenya;
Hon. Prof. Githu Muigai, Attorney General of the Republic of Kenya;
Mr. Richard Etemesi, Chairman, Kenya Bankers Association;
Mr. John Waka, Chairman, Kenya Institute of Bankers;
Chief Executives of Financial Sector Regulators here present;
Distinguished Guests;
Ladies and Gentlemen:
I am delighted to join you this morning at the onset of this landmark Conference. At the
outset, I would like to thank the Kenya Institute of Bankers for inviting me to this forum. I
also applaud all those who participated in organising this conference for their commendable
efforts.
Ladies and Gentlemen: My task this morning is to invite the Minister for Finance to deliver
his keynote address to this gathering and also officially open the forum. But before I do so,
allow me to make some few remarks on the ongoing developments in the financial sector.
Over the last five years, the Kenyan financial sector has witnessed significant
transformational developments. The Kenya Institute of Bankers has been on the driver's
seat to spearhead these developments. Let me highlight a few of these developments:
The growth of technologically enabled financial services, especially through the

inter-linkage of mobile phone technology platforms and banking technology
platforms;
 Increased regional and international expansion and connectivity of financial service
players as well as increased market potential to the region;
 Increased market awareness of customer rights and the resultant emphasis on
consumer protection; and
 Strengthening of oversight mechanisms to protect the integrity of financial systems.
The operationalisation of the National Payment Systems Act and the Financial
Reporting Centre amongst others will strengthen the integrity and stability of the
financial system;
Ladies and Gentlemen: These developments present not only opportunities but also
significant challenges. To be able to exploit the resultant opportunities and surmount the
challenges, there is need to enhance the skills and competence of our human resources. It
is therefore imperative that the Kenya Institute of Bankers and other capacity building
institutions continuously interact with the market for their programmes to remain relevant.
Ladies and Gentlemen: Kenyan banks have taken the lead in positioning themselves for the
expanded market of more than 100 million people in the five East African Community
Countries. More than ten Kenyan banks have presence in the EAC member countries and
beyond. Following the operationalisation of the Customs Union and Common Market, the
EAC member states are currently preparing for a Monetary Union. As part of this preparation,
the EAC Central Banks are harmonizing their supervisory rules and practices while
benchmarking to global standards. This will not only facilitate integration but will also
position the region as a financial hub. To facilitate effective preparations for the monetary
union, KIB should tailor its training programmes to satisfy the emerging needs of a dynamic
regionally integrated financial sector.
Ladies and Gentlemen: Kenya's aspiration of being an International Financial Centre is
already receiving a boost from the increasing interest by leading global banking brands. Over
the last two years, four foreign banking institutions have opened Representative Offices in
Kenya, with four others in the pipeline. These Representative Offices allow the foreign
institutions to study the market with the aim of up-scaling to fully fledged banking
institutions.
Ladies and Gentlemen, it is worth noting that capacity building by banks should not be a
preserve of operational staff as has been the case traditionally, but should span across all
cadres of staff including board members. In this regard, KIB should review its offerings to
ensure that they cut across all levels from the Board to operational levels.
Ladies and Gentlemen, it is now my pleasure to welcome our Chief Guest, Hon.
Robinson Njeru Githae, Minister for Finance, to deliver his keynote address and officially
open the Kenya Institute of Bankers' National Banking and Finance Conference 2012.
Honourable Minister, you have the floor.