Move on banks welcome

The Central Bank’s suspension of licensing of new banks is a signal that the regulator is keen on streamlining the operations of commercial banks.

It is a step in the right direction and should inspire confidence in customers that something is being done to protect their deposits.

The banks also have a responsibility to built public trust by cleaning up their act and steering clear of dealings that weaken public confidence.

The development comes against the background of customers voting with their feet by moving their money from smaller banks to the bigger ones, an indication that the scandals that have rocked the Imperial and Dubai banks have shaken their confidence in the smaller institutions.

While acknowledging that the strength of a bank is not in its size but its credibility, these signs should serve as a wake-up call that if banks fail to regulate themselves, they will be controlled by CBK and market forces.

It is in the interest of bankers to reclaim their integrity, bearing in mind that they are pivotal players in the economy.