The Regulatory Framework of Financial Conglomerates In Kenya Under The Banking Act : Identifying The Gaps and Proferring Reforms

The definitions of banking, and particularly the definition aggrandized under the Banking Act, were drafted in so a rigid manner that they failed to possess futuristic qualities and foresight in light of the greatly and ever evolving field of finance. An analysis of these definitions indeed affirms the position that the laws as enacted were meant to regulate and supervise the traditional banking institutions. The inadequacies of the definition of banking are exemplified by the sprouting of contemporary banking institutions that warrant regulation, owing to the nature of their business, but whose mode and method operationalization and general organizational structure are not a jig-saw fit of the definition proffered by the Act. Among such contemporary conceptions are financial conglomerates. This paper seeks to analyze the regulatory framework of financial conglomerates that engage in banking services under the Banking Act of Kenya, identify the gaps presented by that regulatory framework and proffer reforms thereto. In so doing, this paper shall first address the definition of financial conglomerates, the history surrounding their development in Kenya, the justification for their regulation and supervision, a brief analysis of the regulatory framework of Financial Conglomerates under other Acts of Parliament, the regulatory framework under the Banking Act, an analysis of the jurisprudence emanating from national courts and other courts and issue a comparative analysis of Kenya and other Countries that have adequately managed to regulate financial conglomerates