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KDIC Collaborates with Banks to Enhance Risk-based Premium Assessment Model


In a move aimed at fortifying the stability of Kenya's banking sector, the Kenya Deposit Insurance Corporation (KDIC) has inched closer to finalizing its proposed review of the current Risk-based Premium Assessment Model. This followed a day-long consultative workshop on proposed amendments, that brought together Heads of Risk and Finance from across the banking industry, in line with the KDI Act 2012 and the KDIC Regulations 2015, underscoring the Corporation’s commitment to incentivizing prudent banking practices and ensuring the safety of depositors' funds.

Once finalized, the proposed amendments will be discussed with the Chief Executives and / or Managing Directors of banks ahead of implementation, a move that could signal a significant milestone in bolstering risk management practices in Kenya’s banking sector.  

The proposed amendments are a product of a Technical Working Group (TWG), comprising representatives from member banks and KDIC. The team had been tasked with evaluating and enhancing the existing risk analysis model used for assessing the risk profiles of banks.

Crucially, the Risk and Examination Directorate of KDIC took proactive steps to address concerns raised by stakeholders, including tier one, two, and three commercial banks, as well as microfinance banks. This inclusive approach highlights KDIC's commitment to ensuring that the interests of all member banks are carefully considered in the formulation of regulatory frameworks.

Addressing the workshop on behalf of the CEO, Paul Manga, KDIC’s Director in charge of Risk and Bank Examination assured members that their views will continually be adopted to ensure progressive risk minimization practices.

He further reaffirmed the Corporation’s dedication to collaborative partnerships, saying that KDIC will continue to work closely with banks and other stakeholders aimed at safeguarding depositor interests as well as upholding the integrity of the banking system.

The current Risk Based Premium Model came in force in July 2021, a year after the upward review of the coverage limit.

For further updates and inquiries, stakeholders are encouraged to engage with KDIC and stay informed about developments shaping the regulatory landscape of Kenya's banking sector.