COMMERCIAL BANKS, MORTGAGE FINANCE OR NON-BANK
This paper outlines the various procedures and requirements requisite to the establishment of a commercial bank, mortgage finance institution or non-bank finance institution in Kenya. The Central Bank of Kenya has the legal mandate to regulate the Banking sector in Kenya and most of the other financial institution fall under its jurisdiction too. The paper will begin by outlining all the steps required in the application of a license to start a commercial bank, non-bank financial institution or mortgage finance company. It will then expound on other important issues such as capital requirements, management structure, prohibited businesses, accounts and audits, information and reporting requirements and the deposit protection fund; which are important in the creation and execution of a meticulous plan prior to the establishment of a financial institution. By the Banking Act and other relevant pieces of legislations will be of great usefulness in enlightening this paper from the legal perspective.
License application procedure
The following are the key steps to be followed in applying for license to start a commercial bank, non-bank financial institution or mortgage finance company:-
1. Contact the Central Bank of Kenya at an early stage for a preliminary meeting to discus CBK licensing requirements and related issues.
2. Seek CBK’s approval for the use of the word “bank’’ or “finance” in the proposed name.
3. Once CBK has approved the name, apply to the Registrar of Companies for incorporation of the proposed bank, mortgage finance company or non-bank financial institution as a limited liability company.
4. Upon incorporation of the limited liability company, apply to CBK for a banking, mortgage finance company or non-bank finance institution license. At this stage you should contact the Bank...