By James Anyanzwa
Central Bank has backed the proposal by Finance Minister Robinson Githae to introduce a single financial sector regulator. The bank Governor Njuguna Ndung’u noted that the proposal, if implemented, would help deepen the growth and development of the financial sector.
“I have always talked about segmented markets. The economy is growing and the products must mirror the way the economy is growing. There is merit in the proposal for a single financial sector regulator. We should not just oppose a policy that is going to help,” Prof Ndung’u told a financial sector conference in Nairobi, adding, “We should only oppose a policy that is going to destroy the market.”
Ndung’u’s remarks come even as the Capital Markets Authority (CMA) and other financial sector players expressed reservations about the proposal, which seeks to merge the Capital Markets Authority (CMA), Insurance Regulatory Authority, and Retirement Benefits Authority.
CMA chairman Kung’u Gatabaki recently aid the financial sector regulators needed more powers to act effectively rather than merging their functions, which are quite specialised and distinct. “ I listened to the budget speech with a bit of a surprise. One of the disappointments was the proposal to centralise the supervisory functions of the regulators in the financial sector,” said Gatabaki.
“To try and centralise regulatory powers is really being taken aback. What I would like to see is the empowerment of these regulators so that they can effectively monitor what is happening in their sectors.”
Finance minister Robinson Githae proposed stringent measures aimed at strengthening the operations of the financial sector and ensuring businesses and households find access to affordable credit.
