Consolidate Efforts to Mitigate Regional Bank Failure: Mohamud

Consolidate Efforts to Mitigate Regional Bank Failure: Mohamud

Close collaboration, information sharing and timely intervention will enhance the region’s capacity to mitigate bank failure in future. This is according to the Kenya Deposit Insurance Corporation’s Chief Executive Officer Mr. Mohamud Ahmed Mohamud.

Addressing a delegation from the Reserve Bank of Malawi, Mohamud who also doubles up as the Chairman of the International Association of Deposit Insurers-Africa Regional Committee (IADI-ARC), decried the slow adoption of Deposit Insurance in most jurisdictions, adding that there was need to be proactive aimed at entrenching the concept.

Mohamud noted that: “D.Is all over the world start after a crisis. For instance, the Federal Deposit Insurance Corporation started on June 16, 1933, after the then US President Franklin Roosevelt signed the Banking Act of 1933, following the Great Depression to restore trust in the American banking system”.

While highlighting its experiences, the IADI-ARC Chairman extolled the Corporation’s achievements in Deposit Insurance since inception, affirming KDIC’s commitment towards achieving its mandate and building intra-regional relationship. “Most of you are starting D.Is and I am glad that Malawi has already enacted the law to establish its D.I. This is a journey and we must get it right,” he informed the delegation.

Mr. Mohamud made the remarks during the opening session of a week-long bench marking cum workshop on Deposit Insurance, for the visiting delegation from the Reserve Bank of Malawi. The knowledge sharing exercise, will see the team led by Patrick Mhango, Executive Director of the Reserve Bank of Malawi, sensitized the IADI Core Principles for Effective Deposit Insurance Systems and how to strategically establish a Deposit Insurance, with lessons learnt by the Corporation taking center stage.

Also present was the KDIC Senior Management team among them five of its directors.

The visit by the Malawi delegation, is in line with their country’s desire to join at least 11 other African countries that have already established D.Is as stipulated in the Core Principles, with Kenya being seen as the anchor state in the East African region.