Bankers in the country have been challenged to institutionalize good corporate governance with a view to enhancing their risk management framework and forestalling potential risks that could impede the stability of the industry.

This was revealed during the inaugural high-level breakfast meeting on Corporate Governance organized by the Kenya Institute of Bankers in conjunction with the sponsoring organization the Kenya Deposit Insurance Corporation (KDIC).

Participants who included top industry players were informed that good corporate governance was the surest way of ensuring sustainability and achieving ‘zero bank failure’ in the country.

In his address, KDIC CEO Mr. Mohamud A. Mohamud, reminded participants of the need to embrace good corporate governance pointing out that previous bank failures in the country had grossly affected many lives. “If you address poor corporate governance, we will not have bank failures. And so all of us must work towards ensuring that our banks are working for the depositor because bank closure affects all facets of life,” said Mohamud.

While acknowledging that the concept of Deposit Insurance was Africa’s next frontier, Mohamud called on banks to embrace the spirit of information sharing so as to push corporate governance to higher levels.

Mr. Mohamud explained that the Differential Premium System (DPS) currently being implemented by the Corporation, was an incentive to enable banks  interrogate and manage their risks. DPS is a premium calculation model that seeks to differentiate the premium paid by banks based on their risk profile.

Mr. Mohamud said that the Corporation will continue playing an active role in enhancing stability in Kenya’s financial sector through strategic partnerships. Mohamud said: “Capacity will be needed that’s why we want to work with similar institutions such as KIB so that our people remain more competitive and positioned to work in the region. We want to work together so that we can build competencies and skills which can be exported.”

Others who spoke during the meeting were the Executive Director of The Leadership Group Dr. Martin Oduor-Otieno and Mr. Julius Alego, Chief Executive Officer of KIB.