The Central Bank is the banker for the government, encompassing the national government, government ministries, departments & agencies (MDA’S) and county governments. These institutions hold a variety of accounts with the Central Bank, depending on their needs, which allow them to receive deposits and make payments. The Central Bank monitors these accounts to ensure that the institutions aren’t at risk of overdraft, and also advises the institutions on financial matters.

Banking Services to the Government

The Central Bank is the banker for the government, encompassing the national government, government ministries, parastatals and county governments. These institutions hold a variety of accounts with the Central Bank, depending on their needs, which allow them to receive deposits and make payments. The Central Bank monitors these accounts to ensure that the institutions aren’t at risk of overdraft, and also advises the institutions on financial matters.

Kenya Revenue Authority

As a parastatal, the Kenya Revenue Authority (KRA) houses its main tax collection account at the Central Bank. While select commercial banks are authorized to hold collection accounts on behalf of KRA, allowing the general public to conveniently make tax payments, money collected in those accounts is deposited into the main account at the Central Bank.

Because the tax collection account is held at the Central Bank, funds deposited into the account cannot be interfered with. Once payments are deposited into the KRA account, they can only be transferred with permission from the Ministry of Finance.

Banking Services to the County Governments

The County Governments, which comprise the County Executives and County Assemblies also maintain various accounts at the Central Bank of Kenya which include:

  1. Recurrent Accounts
  2. Development Accounts
  3. Deposit Accounts
  4. County Projects Accounts
  5. County Assembly Accounts

These accounts are used to facilitate receipt and payment of funds in accordance with the Public Finance Management Act.

Banking Services to Commercial Banks and Microfinance Banks

 The Central Bank provides the following services to Commercial Banks:

  1. Maintains accounts to enable commercial banks to effect and receive payments from other commercial banks, the government and other external financial institutions in Kenya shillings and foreign
  2. Provides a Real Time Gross Settlement (RTGS) system to enable commercial banks settle their interbank obligations on a real time
  3. Provides liquidity through the Intra-day Liquidity Facility (ILF) and the Overnight Loan These loans are secured by government securities.
  4. Hosts the Kenya Bankers Association’s Automated Clearing House (ACH).
  5. Facilitates completion of commercial banks and microfinance banks external audits by providing confirmation of balances in their clearing accounts and cash reserve ratio accounts in our books to their external
  6. Provision of the Daily Interbank Money Market Report, this is a summary of daily borrowings among commercial banks in the interbank market and guides the industry in pricing interbank loans.

Banking Services to the East African Community

The Central Bank also provides some services for the East African Community currently comprising of Kenya, Uganda, Tanzania, Rwanda and Burundi, facilitating payments, including the exchange of currencies, between countries. Internet Banking

The Central Bank offers Internet Banking services to government ministries, departments & agencies, County Executives & County Assemblies, as well as Commercial & Micro-Finance Banks allowing them to monitor and manage their accounts online.

18 Types of Bank Services

 In the modern world, banks offer a variety of services to attract customers, However, some

However, some basic modern services offered by the banks are discussed below: List of 18 banking services are;

  1. Advancing of
  2. Discounting of Bills of
  3. Check/Cheque Payment
  4. Collection and Payment of Credit Instruments
  5. Foreign Currency
  6. Bank
  7. Remittance of
  8. Credit
  9. ATMs
  10. Debit
  11. Home
  12. Online
  13. Mobile
  14. Accepting
  15. Priority
  16. Private


1.   Advancing of Loans

Banks are profit-oriented business organizations.

So they have to advance a loan to the public and generate interest from them as profit.

After keeping certain cash reserves, banks provide short-term, medium-term and long- term loans to needy borrowers.

2.   Overdraft

Sometimes, the bank provides overdraft facilities to its customers through which they are allowed to withdraw more than their deposits.

Interest is charged from the customers on the overdrawn amount.

3.   Discounting of Bills of Exchange

This is another popular type of lending by modern banks.

Through this method, a holder of a bill of exchange can get it discounted by the bank, in a bill of exchange, the debtor accepts the bill drawn upon him by the creditor (i.e., holder of the bill) and agrees to pay the amount mentioned on maturity.

After making some marginal deductions (in the form of commission), the bank pays the value of the bill to the holder.

When the bill of exchange matures, the bank gets its payment from the party, which had accepted the bill.

4.   Check/Cheque Payment

 Banks provide cheque pads to the account holders. Account holders can draw cheque upon the bank to pay money.

Banks pay for cheques of customers after formal verification and official procedures.

5.   Collection and Payment of Credit Instruments

 In modern business, different types of credit instruments such as the bill of exchange, promissory notes, cheques etc. are used.

Banks deal with such instruments. Modern banks collect and pay different types of credit instruments as the representative of the customers.

6.   Foreign Currency Exchange

Banks deal with foreign currencies. As the requirement of customers, banks exchange foreign currencies with local currencies, which is essential to settle down the dues in the international trade.

7.   Consultancy

Modern commercial banks are large organizations.

They can expand their function to a consultancy business. In this function, banks hire financial, legal and market experts who provide advice to customers regarding investment, industry, trade, income, tax etc.

8.   Bank Guarantee

Customers are provided the facility of bank guarantee by modern commercial banks.

When customers have to deposit certain fund in governmental offices or courts for a specific purpose, a bank can present itself as the guarantee for the customer, instead of depositing fund by customers.

9.   Remittance of Funds

 Banks help their customers in transferring funds from one place to another through cheques, drafts, etc.

10.    Credit cards

A credit card is cards that allow their holders to make purchases of goods and services in exchange for the credit card’s provider immediately paying for the goods or service, and the cardholder promising to pay back the amount of the purchase to the card provider over a period of time, and with interest.

11.    ATMs Services

ATMs replace human bank tellers in performing giving banking functions such as deposits, withdrawals, account inquiries. Key advantages of ATMs include:

  • 24-hour availability
  • Elimination of labor cost
  • Convenience of location

12.    Debit cards

Debit cards are used to electronically withdraw funds directly from the cardholders’ accounts.

Most debit cards require a Personal Identification Number (PIN) to be used to verify the transaction.

13.    Home banking

Home banking is the process of completing the financial transaction from one’s own home as opposed to utilizing a branch of a bank.

It includes actions such as making account inquiries, transferring money, paying bills, applying for loans, directing deposits.

14.    Online banking

Online banking is a service offered by banks that allows account holders to access their account data via the internet. Online banking is also known as “Internet banking” or “Web banking.”

Online banking through traditional banks enable customers to perform all routine transactions, such as account transfers, balance inquiries, bill payments, and stop- payment requests, and some even offer online loan and credit card applications.

Account information can be accessed anytime, day or night, and can be done from anywhere.

15.    Mobile Banking

 Mobile banking (also known as M-Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA),

16.    Accepting Deposit

Accepting deposit from savers or account holders is the primary function of a bank. Banks accept deposit from those who can save money but cannot utilize in profitable sectors.

People prefer to deposit their savings in a bank because by doing so, they earn interest.

17.    Priority banking

Priority banking can include a number of various services, but some of the popular ones include free checking, online bill pays, financial consultation, and information.

18.    Private banking

Personalized financial and banking services that are traditionally offered to a bank’s digital, high net worth individuals (HNWIs). For wealth management purposes,

HNWIs have accrued far more wealth than the average person, and therefore have the means to access a larger variety of conventional and alternative investments.

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