t + 2 clearing cycle, thus saving customers time and transport costs. thus, the implementation of cheque truncation system has delivered on improving the efficiency of the clearing process, reducing the cost associated with handling physical cheques and reducing the clearing period. more recently, we have witnessed additional initiatives to enhance efficiency in the cheque clearing process. for example, with effect from 1st july, 2012, kba waived commissions bis central bankers ’ speeches charged on cheques cleared from upcountry and remote bank branches thus reducing the cost of clearing cheques. prior to cheque truncation, bank branches in the country were divided into local, upcountry and remote zones. on 16th january 2012, ( kba ) issued a circular effectively reducing the clearing period to 2 clearing days ( t + 2 ). in so doing the association passed on the benefits of cheque truncation to banking customers and the public in general. in june 2013, the automated clearing house processed 1. 5 million cheques valued at kes 175. 1 billion. due to the reduced clearing period, beneficiaries received their funds a day earlier to finance their economic activities. ladies and gentlemen, the final deliverable initiative of the cheque truncation project is to reduce the clearing period to 1 clearing day ( t + 1 ). today, i am happy to announce that we have achieved this deliverable that is t + 1 clearing cycle, which takes effect on 19th august, 2013. this means that banks will be moving to the one day cheque clearing cycle, which will shorten the time it takes for banks to process cheques. by further reducing the clearing period, banking customers will benefit by accessing their funds at a much shorter time to conduct economic activities. ladies and gentlemen, the continued systematic modernization of the payments and settlements systems is aimed at enabling the country ’ s payment system to attain international standards and ensure that kenya becomes a financial hub in the region as well as the preferred investment destination. furthermore, a fundamental policy objective for payments modernization remains the achievement of safety, efficiency and effectiveness of the payment system as well as promoting access and inclusion to financial services. to achieve these objectives, the bank works in close liaison with the government, the kenya bankers association ( kba ), the financial sector in general and other stakeholders. ladies and gentlemen, as we make this important announcement, may i take this opportunity to sincerely thank the kba, who has been an instrumental player and

njuguna ndung ’ u : shariah - compliant banking and finance in kenya remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the launch of the first community bank ’ s mutual fund, nairobi, 6 march 2012. * * * ms. stella kilonzo, chief executive, capital markets authority ; mr. steve mainda, chairman, insurance regulatory authority ; mr. hassan varvani, chairman, first community bank ltd ; mr. abdullatif essajee, managing director, first community bank ltd ; mr. nathif adam, director, first community bank capital ; all the excellencies here present ; board members of first community bank ltd here present ; distinguished guests ; ladies and gentlemen : i am delighted to be with you this evening at the launch of first community bank ’ s shariahcompliant mutual fund and to celebrate the success of islamic finance. allow me at the outset to compliment the board and management of first community bank ltd for growing the bank from a start - up operation in april 2008, to an institution now boasting of deposits amounting to ksh. 7. 3 billion and assets of ksh. 8. 4 billion as at 31st january 2012. indeed, first community bank ltd pioneered the establishment of shariah - compliant banking in kenya and i am happy to note that the bank has continued to keep up the momentum by introducing a range of innovative shariah - compliant products. these products will go a long way in deepening kenya ’ s financial sector. we can now boast of having a full - fledged shariah - compliant financial infrastructure, thanks to the effort of nathif adam. ladies and gentlemen : kenya has not been left behind in the world - wide phenomenal growth of shariah - compliant finance and banking and huge gains have been made since its inception. today, we have two banks that exclusively offer shariah - compliant products and who collectively, command a market share of 1 % of the banking sector assets, in less than 4 years of operations. having noted the growing interest in shariah - compliant finance, some of the conventional banks have also created specific windows and divisions to enable them offer shariah - compliant products to their customers. i am encouraged to note that other institutions have now stepped in to offer shariahcompliant financial services beyond banking. takaful insurance of africa has been licensed by the