Speaking during a press briefing following the Monetary Policy Committee meeting on Friday, CBK Governor Kamau seemed unfazed by the fears from Kenyans that the law could lead to banks collapsing.
The law, contained in the Business Laws (Amendment) Bill, 2024, proposed by the CBK was passed by Members of Parliament on Wednesday night and awaits the signing by President William Ruto to become operational.
“We do hope there will be mergers. And in our view, having stronger banks and a stronger capital base, we will be able to withstand many of the new threats we are seeing,” asserted the governor.
A merger in banking occurs when two banks combine to form a single entity. This can involve either creating a new parent company that oversees both institutions or one bank absorbing another. In his explanation, the governor expects a merger would raise the core capital of banks, increasing their capacity to absorb shocks in the financial sector.
At this time, it remains a projection. However, if it is actualised, Kenyans can expect changes like account numbers, new debit/credit cards, or updated banking platforms. However, it may also mean access to a broader range of services and a larger branch/ATM network.
Currently, banks are required to have a minimum core capital of Ksh1 billion.
