development aspirations are taken into account in formulating the policy position. the payments system has undergone active modernization that began in 1998 to develop a world - class payment system to ensure : increased efficiency and effectiveness of the clearing and settlement ; provision of a variety of instruments and mechanisms for an integrated, modern and technologically sound payment system for transfer of funds between transacting parties ; reduction and containment of systemic and other payment related risks ; reduction of settlement cycles ; enhanced access to financial services and promotion of kenya as a competitive regional and international financial center. given the importance of payment and settlement systems in the economy, the central bank, with the support of kenya bankers association, implemented a real time gross settlement system two years ago going by the acronym kepss ( kenya electronic payment settlement system ). the central bank is happy with the way that the banking sector adapted to its usage especially for inter - bank payments. i commend the banking fraternity for this cooperation. the total value of transactions processed through the system increased by 71. 4 % from kshs 496. 3 billion in august 2005 to the current level of kshs 850. 7 billion. a commercial bank survey conducted in july 2007 indicated that 75. 1 percent of the users were corporate while 24. 9 percent were individuals. central bank is, however, convinced that this system ’ s usage for third party payments can still be enhanced and accordingly, the bank is seeking your support in achieving this objective by way of pricing the service competitively among other contributions. the bank has also initiated action in a number of areas namely : linking the central government and kenya revenue authority to kepss and capping the value of payments processed through the clearing house in order to reduce systemic risk associated with the large value payments while at the same time increasing the number of transactions processed on a rtgs basis. turning to the retail payment sector, the central bank has observed increased use of plastic money or payment cards and the use of mobile phones to transfer money in kenya. in a recent survey carried out by the central bank, atms in kenya grew from 648 in june 2006 to 844 in june 2007. the mobile phone as a means of transferring money was introduced early in the year and is recording rapid increase in usage especially for rural to urban funds transfers. this phenomenal growth is evidence of the modernization and innovations taking place in payments in the country. in order to facilitate this growth further, banking institutions are encouraged to expand access to the rural areas without ignoring the

this in turn means also better incentives in banking and hence a more stable financial system. preparations for single supervisory mechanism let me now share with you some recent developments in the single supervisory mechanism ( ssm ). the eu regulation assigning supervisory tasks to the ecb became effective in early november 2013. already well ahead of this time in late summer 2012, the ecb and national supervisors established the high - level group which steered practical preparations to ensure timely adoption of supervisory responsibilities by the ssm. thus we have got a “ flying start ” for the whole project. as a concrete step, the ecb governing council nominated ms daniele nouy for chair of the supervisory board of the new single supervisory mechanism. the heads of directorates, four director generals have been appointed and most of the mid - level managers have been nominated as well. a broader recruitment process of supervisors and analyst is under way and they will join the ecb in waves by the end of the year. the supervisory board had its historical first meeting in january and now on it meets twice a month. at the beginning many of the issues have related to accepting, confirming and further developing the issues prepared by the high - level group. now there is an on - going transition period, during which a comprehensive assessment of significant banks is carried out. during the same period other preparations for the ssm are to be completed. bis central bankers ’ speeches comprehensive assessment the comprehensive assessment of european banks is an essential element of the preparations for the ssm. it should be noted that the ssm regulation also enables the ecb not only to obtain all the relevant information from the national authorities necessary for making the assessment but also to take over direct supervision of any credit institution it deems necessary. this is important to guarantee consistent application of high supervisory standards. the comprehensive assessment has three main goals. first of all, the assessment aims at transparency through enhancing the quality of information available on the condition of banks. its second goal is to repair banks ’ condition by identifying and having the necessary corrective actions implemented where necessary. finally, the comprehensive assessment builds confidence by assuring all relevant stakeholders that banks are fundamentally sound and trustworthy. the ecb will conduct the comprehensive assessment in close cooperation with national authorities, and also with esrb and eba. the ecb will detail the design and strategy of the assessment exercise, monitor its execution, perform quality assurance as well as collect and consolidate the results and finalise and disclose the overall assessment. national supervisors execute the