Depositors’ insurer nears split from Central Bank

Kenya Deposit Insurance Corporation CEO Mohamud Ahmed. FILE PHOTO | NMG 

By PATRICK ALUSHULA
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Summary

• Transitioning KDIC from a department of CBK into a stand-alone State corporation was initially set to be completed in 2014 but the lack of substantive CEO for the first four years stalled the process.
• Chief executive Mohamud Mohamud now says the entity is nearing completion of phasing out CBK staff as it moves to have complete independence.

Kenya Deposit Insurance Corporation (KDIC) is working on a complete split from the Central Bank of Kenya after moving into its own offices and hiring new staff.

Transitioning KDIC from a department of CBK into a stand-alone State corporation was initially set to be completed in 2014 but the lack of substantive CEO for the first four years stalled the process.

Chief executive Mohamud Mohamud now says the entity is nearing completion of phasing out CBK staff as it moves to have complete independence.

“We have remained with just a few staff from CBK. We started phasing them out last year and now most of the staff are ours,” said Mr Mohamud in an interview.

“Our new organisation structure has received approval from the National Treasury so we are now independent in staffing matters. CBK staff have only remained in some support areas.”

KDIC, which was established in 2012 as the successor of the Deposit Protection Fund, left CBK Pension House premises last year to its new offices on the UAP Old Mutual Towers, Upper Hill, Nairobi.

Mr Mohamud says KDIC, currently with 50 staff, will recruit an additional 20 by end of June. The agency plans to have a workforce of 160 within the next two years.

The Auditor-General’s office had observed in the annual report covering the year to June 2018 that continuing to rely on CBK staff could expose KDIC to legal action.

This is because the National Treasury had appointed July 2014 as the date by which KDIC was to complete the separation.

KDIC also plans to buy land and build its own offices as well as buy three vehicles. In the financial year ending June 2018, it disclosed that it had capital commitments of Sh1.68 billion.