##md will facilitate the growth of government securities by broadening significantly the investor base to retail investors. the second product is m - akiba. this is a critical government initiative, which seeks to increase the public ’ s participation in government securities through the existing mobile - phone bis central bankers ’ speeches money transfer services, and with a low minimum investment amount of us $ 30. the first m - akiba infrastructure bond will be launched shortly as the necessary arrangements are in the final stages, and is expected to mobilize ksh. 5 billion ( about us $ 50 million ). retail investors will be able to register, bid and pay for government securities through the existing mobile platforms. this will provide alternative investment options to retail investors who have long been poorly remunerated especially for their deposits held by banks. these products will be transformational – in addition to promoting financial inclusion, they will facilitate a change in the population ’ s savings culture, and ultimately lead to an increase in national savings. however, as the digital platforms continue to evolve, there are challenges and risks that need to be addressed. it is therefore important that countries continue to share experiences and strengthen partnerships based on best practices to address these challenges. the state of the banking sector in kenya finally, i would be remiss if i did not say a few words about the recent developments in our banking sector. in the main, concerns have been raised following the placing of three banks in receivership, since august 2015. we have underscored that the central bank ’ s actions were necessitated by unique circumstances in each of these banks, and that these were carried out in the interest of the depositors, creditors, and the wider public interest. we have also indicated that the weaknesses revealed by these cases are not systemic and the banking sector remains strong and stable. the capital - adequacy ratio stood at 18. 8 percent in march 2016, well above the statutory minimum of 14. 5 percent. the average liquidity ratio rose to 39. 8 percent in march 2016, above the statutory minimum of 20 percent and higher than 38. 1 percent in december 2015. nevertheless, some challenges remain. for instance, interest rates spread remain very high : the spread between the average commercial banks ’ lending rate and deposit rate stood at 10. 3 percent in march 2016. poor liquidity management and distribution remains a key concern, for which remedial actions are being taken. bank supervision is also being strengthened urgently. the central bank remains committed to

to divert cash and assets, often outside of our jurisdictional reach. the rbi has been clamping down on the failure to recognise asset quality as non - performing as per its norms by requiring that banks, whose “ divergence ” exceeds by 15 % of the true nonperforming assets as per the norms, disclose the divergence. this should restore some market discipline against such practices, especially in the case of private sector banks. however, ultimately there also needs to be a framework in place for time - bound resolution of the underlying stress in assets that limits the discretion of banks to delay the recognition of stress, ever - green “ zombie ” or living - dead borrowers, and poorly allocate credit. to this end, i wish to present and clarify the rationale behind rbi ’ s revised framework for prompt recognition and resolution of stressed assets. the framework that was released last month remains somewhat under - appreciated in terms of its importance. so let me lay it out. prompt recognition and resolution of stressed assets – revised framework 1. the banking regulation ( amendment ) act, 2017, and the subsequent authorisation given by the government of india therein, has empowered the reserve bank to issue directions to the banks for resolution of stressed assets, including referring assets to the insolvency and bankruptcy code 2016 ( ibc ). the reserve bank has taken steps over the last year in this direction, with a focus on reference to the ibc of certain large value stressed accounts, covering approximately 40 % of banking sector ’ s overall exposure to the stressed assets. 5 / 8 bis central bankers'speeches 2. the revised framework for resolution of stressed assets released by the reserve bank on february 12, 2018 is a step towards taking these initial steps to their natural conclusion and laying down a steady - state approach. the steady - state approach is aimed at ensuring early resolution of stressed assets in a transparent and time - bound manner so that maximum value could be realised by the lenders while also recognising the potential ongoing concern value of stressed assets. as explained below, this approach is a positive step towards strengthening the credit culture in the economy, at both borrowers and banks. 3. various special schemes for resolution, which were introduced by the rbi in the pre - ibc context, had made the resolution process driven by asset - classification consideration of lenders. in particular, the forbearance that was embedded in the schemes to make it easier for banks to resolve assets became an end