Commercial Banking in Kenya

4222 Words Jul 5th, 2012 17 Pages
EGERTON UNIVERSITY TOWN CAMPUS

FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTING, FINANCE & MANAGEMENT SCIENCE

NAME: OCHIENG JARED OPONDO

REG NO: C12/60275/09

GROUP: A

FACULTY: COMMERCE

COURSE: BCOM 330; Financial Institutions and markets

TASK: TERM PAPER

TITLE: COMMERCIAL BANKING IN KENYA

PRESENTED TO: MRS. BOSIRE MARY

PRESENTED ON: 19TH October 2011

ABSTRACT:

This term paper analyses the commercial banking system in Kenya. In particular it focuses on the history of commercial banks from a general perspective then narrows down to Kenya’s context. It looks at the importance of commercial banks in Kenya, the roles/functions of commercial banks. It then focuses on the regulations that govern the commercial banks.
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Even after the introduction of coinage these Egyptian grain banks served to reduce the need for precious metals which tended to be reserved for foreign purchases, particularly in connection with military activities.
B: KENYAN CONTEXT

HISTORY AND DEVELOPMENT OF COMMERCIAL BANKS IN KENYA

COLONIAL PERIOD ERA

The history of banking in Kenya dates back to the colonial period. Colonial rule brought in its wake new forms of banking. British commercial banks started operations in Kenya during the 1890s. The operations of these foreign-owned banks were characterised by high degree of concentration, branch banking, an almost exclusive concern with financing external trade and for many decades, a lack of interest in, or involvement with, the African population.

As Kenya became more and more part of this capitalist world economy, the banks established themselves in the colony to provide services for financing exports and imports. Three British banks dominated banking in colonial Kenya. The National Bank of India (later National and Grind lays Bank) began operations in 1896. It was followed in 1910 by the Standard bank of South Africa (later standard Bank and Standard Chartered), and shortly thereafter the national Bank of South Africa entered the field. In 1925, the latter merged with two other British banks to form Barclays Bank Dominion Colonial and overseas (later Barclays Bank).

Although their primary interest was to finance external trade, as time
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