Ojwang George Omondi
In 2012 the Central bank of Kenya issued revised and new prudential and risk management guidelines applicable to commercial banks, mortgage finance companies and non-bank financial institutions licensed under the Banking Act of Kenya. This was informed by the need to up-date the banking sector regulatory framework in light of significant changes in local, regional and global banking sector’s operating environment. Key drivers included a desire to adapt new global best practices in banking sector such as the revised Basel Core Principles Banking Supervision. Among the guidelines issued include regular stress testing by commercial banks and the submission of a report to Banking Supervision Department on a quarterly basis. This paper investigated risk management techniques employed by commercial banks in Kenya and recorded several techniques including stress testing and contingency planning.
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