There has been an existing fundamental flaw with different regulatory bodies in the country – a penchant to bury their heads on the sand while those they are supposed to regulate have a field day and run riots.In terms of regulatory bodies, Kenya is a highly regulated country. There are tens of regulators overseeing various sectors and industries. They range from the Communications Authority, Capital Markets Authority, Kenya Film Censorship Board, Insurance Regulatory Authority, Kenya Film Classification Board, Sacco Societies Regulatory Authority, Central Bank of Kenya (CBK) and many more.

Despite every aspect of Kenyan life being regulated, looking at the conduct of the country’s business environment, it is evident that regulators have largely failed to live up to their billings. Indeed there is a general consensus that many of the regulators are in bed with the same companies and industries they are supposed to regulate and ensure the adherence of best business practices.

The fact that regulators are either in deep slumber, do not care to do their jobs or have outrightly been compromised or intimidated by those they are supposed to regulate has been badly exposed by CBK Governor Dr Patrick Njoroge. Since taking over in June last year, Dr Njoroge has been a no nonsense regulator of the banking sector.

In the 10 months he has been in office, Kenyans have come to learn in utter shock and disbelief of the widespread criminal activities going on in various commercial banks. Some Kenyan banks, it has emerged, are a bedrock of selfish and greedy boards and managements that have no respects for prudential guidelines or sympathy for innocent depositors.

The placing under receivership of some banks, and worries that more could follow, has exposed how some banks have been operating with impunity. Going by CBK actions, it has come into light that some banks had perfected the art of ‘creative accounting’, duping their shareholders of how they are returning high flying profits.

The CBK cleanup of the banking sector is nothing short of brave, and commendable. While it is painful for those affected, and particularly innocent depositors who cannot access their funds or transact, it is a price to pay for the long term stability and health of the banking industry. Dr Njoroge has explicitly emphasized this fact, maintaining the CBK actions are in the best interest of the sector and Kenya in general.

CBK has set a good precedent and other regulators should borrow a cue. There have been cases of malpractices and misconducts among capital markets players, insurance companies, pension funds, saccos and all other sectors and industries.

Just like the CBK, all the different regulators should embark on a process of cleanup. Indeed it is time for regulators to stand up and crack down on rogue players and actors in their respective jurisdictions. It is time for everyone to smell the coffee and know that you cannot operate with impunity and get away with it.

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