Central Bank of Kenya aiding banks to hide vital details

The importance of notes in financial reports cannot be gainsaid.

However, I have noticed that the Central Bank of Kenya (CBK) is helping commercial banks to hide vital information from the prying eye of the public. The commercial banks report according to the template provided by the CBK, which includes the notes.

The loans to associate companies are lumped together with loans to directors. I feel these should be shown separately in order to reveal the extent of indebtedness of each category. The loans to directors should include those of non-executives and full time service directors.

Finally, CBK does not require the interest charged on the above mentioned loans to be disclosed separately.

The profit or loss and other comprehensive income carries a joint figure of interest income. This is not informative enough and something is being hidden.

It is important to remember that bank directors and employees obtain loans at very low interest rates. I do not begrudge them but figures should be disclosed.

Shareholders would like to have a glimpse of all financial items.