The relationship between the bank and the customer is that of a Debtor and Creditors depending upon whether the account is in debit or credit. This relationship is governed by the Laws of Kenya.
Some banks in Kenya requires the customer to maintain a minimum account balance, if the account goes below the minimum levels it attracts charges for unremunerative accounts.
There are several types of accounts one can open in Kenya most notably.
- Current Account– These the day to day transactions account. students account and salary account fall under this category and no interest is paid to deposit. you’ve got to be keen on this kind of accounts the hidden charges are many.
- Saving- Deposits earn an interest and the number of withdrawals is restricted to less than 5 in a month. they’re good for funds you want to save for near future use.
- Term Deposit- (Fixed Accounts)– This type do pay a good interest rate to deposit on maturity. most banks in Kenya have structured their TD accounts in a period of 3,6,9 and 12 months period.
Foreign currency account can also be provided on request especially for major currencies GBP, USD,EUR, JPY and CAD these are very important especially for traders involved in import and export trade,with these accounts you will not need to negotiate a rate for foreign currencies sent to your bank to be credited, thus saving you on loses due to foreign exchange fluctuations.
Bank charges- differ from bank to bank and depends on the type of account provided. the more the features of the account the higher the charges.
For a personal account.
For a Partnership.
The most important document that the banks will demand is a copy partnership deed and their other personal identification documentation
For a limited liability company
Among the questions you must be prepared with while planning to visit your banker of choice include in the business mailing address,physical address(city/town), telephone numbers , the nature of business (this is insisted on because of CBK guidelines on KYC -Know Your Customer a banker is expected to his clients), date of incorporation, certificate of incorporation and its number. directors/signatory details(those entitle to transact on the company behalf ). some banks might ask for a sketchy map to your location and details of other accounts held with local commercial banks
- Memorandum and article of associations which should be certified by the chairman and secretary of the company to be an up to date and true copy currently in use.
- Certificate of incorporation- original to be submitted for perusal,inspection and return.
- List of names and addresses of present and future chairpersons and directors and their individual PIN numbers
- Copy of Resolution passed by the board of directors of the company authorizing the opening of the company’s account with the bank, with instructions regarding operations of the account.
Other operational guidelines
Authorized signatories – The customer is expected to give to the bank in a form acceptable to the bank specimen of the signature of the customer and any other person authorized by the customer to operate the account.the bank reserves the right to reject the specimen.
interest – Interest on overdrawn accounts,loan accounts or any other facilities granted by the bank to the customer at a per annum rate to be determined by the bank at its own discretion, without notice to the customer and within the limits permitted by the law.such interest is calculated on a daily basis but debited monthly.
legal charges – Advocate and client costs incurred by the bank in obtaining legal advice in connection with the account
commissions – Such as rate and other bank charges these include electronic funds transfer I.e EFTs, RTGS and TTs
statement deemed approved -it the customer doesn’t object the contents of the statement issued within 28 days of receipt its deemed approved by the customer.