By FJ Reporters
Even as the Central Bank of Kenya (CBK) goes the extra mile to accommodate the innovative mobile money transfer concept, this has not gone down well with the banking fraternity.
While a new law on mobile banking is being hatched, players in the banking sector are uneasy with the CBK, which has lately been warming up to mobile phone service providers, eager to give credence to the two mobile money transfer services â M-Pesa and Zap.
The banks say the change of tune by CBK is seen as encouraging competitors to âencroachâ into their own turf.
"We are open to all proposals. The market is developing and we cannot hold them back. Banks can create platforms for money transfers and we license those frameworks as long as they are sound and safe," says Prof Njuguna Ndungu, CBK Governor.
Electronic money transfer service has for long been an exclusive domain of commercial banks, but this revenue stream has since seen the entry of M-Pesa and Zap- Pesa Mkononi, services offered by Safaricom and Zain respectively.
partnership
CBK maintains it has given commercial banks the option of partnering with these service operators, an offer many are still reluctant to take up.
A Zap money transfer dealer serves customers at one of the Zain outlet. Electronic money transfer service has for long been an exclusive domain of commercial banks, but this revenue stream has since seen the entry of mobile operators.
So far, only five commercial banks have entered into partnership agreements with the mobile operators. These include among others, Kenya Commercial Bank (KCB), Consolidated Bank and Post Bank.
The CBK Act prevents commercial banks from going into micro payments space, where M-pesa and Zap feature strongly. " CBK is yet to open space for banks to compete in this space. But they are free to partner with these service providers, Stephen Mwaura Nduati, Head, National Payments System told participants at a banking conference held last week at Kenya School of Monetary Studies.
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