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KDIC to Enhance Strategic Partnerships, Build Sector Capacity: Mohamud.

The Kenya Deposit Insurance Corporation (KDIC) has moved to leverage its existing mutual partnerships and legal framework, aimed at enhancing the Corporation’s mandate as well as entrench the concept of Deposit Insurance in the country.

 

While actively contributing to Kenya’s financial stability, the move will also enable KDIC to continue synergizing with other safety net players, with a view to forestall and resolve any potential industry challenges relating to its mandate.

 

In the latest series of strategic partnerships with like-minded stakeholders, the Corporation alongside its parent ministry, the National Treasury (NT), have held a week-long collaborative offsite workshop.

 

Speaking during the workshop that also sought to build the capacity of NT officers in Deposit Insurance, KDIC Chief Executive Officer Mr. Mohamud A. Mohamud underscored the importance of such partnerships in fostering financial stability. “NT is a critical and fundamental partner in our crisis simulations because it is our Business Continuity Plan and provides backstopping facility. We are emulating Nigeria and the US where there is a lot of synergy in supervision and inspection so that we don’t get to an emergency resolution of a troubled member institution,” said Mohamud.

Mr. Mohamud A. Mohamud, CEO, KDIC making his remarks during the workshop.

He added, “Bearing in mind that closure of a bank adversely affects staff, depositors and the general public. KDIC is determined to mitigate and minimize disruption, and restore normalcy as fast as possible.”

 

Mr. Dulacha Barako, Director, Financial and Sectorial Affairs, National Treasury.

 

The Corporation is currently resolving a number of financial institutions now in liquidation such as Chase Bank Limited (IL), Dubai Bank (IL) Euro Bank (IL) and Kenya Finance Bank (IL).

 

Mohamud revealed that the Corporation had made significant progress on all fronts, with  99% of all depositors in the country being covered following the implementation of the revised coverage limit of up to Ksh.500,000. “Some ask why we don’t have 100% coverage of all deposits. This is because among many other things, is to prevent moral hazard. If people know there is 100% coverage, there are chances of wanton abandon in banking best practices. To mitigate this, we manage the numbers of the coverage that incentivize prudence in bank operations as well as protects 99% of all depositors in Kenya, specifically, the most vulnerable and unsophisticated,” he pointed out.

National Treasury and KDIC Staff pose for a group photo marking the end of the week-long event.

 

The National Treasury was represented by Dulacha Barako, Director Financial and Sectoral Affairs. Acknowledging KDIC’s contribution in the industry, Barako noted that the workshop had provided his team with an opportunity to appreciate areas of mutual engagement going forward.

 

The workshop cum training was also attended by KDIC Senior Management among the General Managers Paul Manga (Risk and Examination) and Robert Mbarani (Corporate Services.