Postbank Kenya

New Transport and Communication Systems

When East Africa became a British protectorate in 1895, it was admitted into the Postal Union. The postmaster general (in charge of the postal system), Thomas E. C. Remington, was residing in Zanzibar at the time – as it was the Capital of Oman and the most vibrant city on the Swahili Coast. The following year when construction of the East Africa railway began, Mombasa’s potential as a prominent coastal town became known. In 1899 Remington moved to Mombasa. This was just two years before the completion of the railway, and the extension of the protectorate to Uganda. The latter informed the amalgamation of East Africa’s postal services with Uganda in 1903. Tanganyika would enter this postal union, though much later – in the 1920s.

The railway line opened the interior region of East Africa, inviting more Europeans to settle in different cities along the line – including Nairobi, which became the new capital of the protectorate in 1905. The protectorate by then also had a money market with East Africa Protectorate Pice and the East Africa Rupees as the main currencies. The Mombasa Currency Board governed the monetary sector.  

The following year, a two-storey building was completed within the Nairobi Central Business District, specifically on Sixth Avenue (now Kenyatta Avenue). This became the Nairobi Post Office and was managed by the colonial postal services. 

A Bank for Africans

As the first decade of the 20th century neared, the need for banking services increased – specifically among Africans. Banks had come to be known as trusted and secure locations to keep money. More so, because of the railway station in Nairobi, and the development of the city in general, Africans had acquired employment and were being paid in cash – which was an item not just from hard work, but of value. And so in 1910 the colonial postal services established the Post Office Savings Bank. This was the first bank that offered banking services to Africans living and working in East Africa. By March 1911, the bank had 1,231 accounts, and of this number, over 600 belonged to Africans. However, the bank’s location limited it to Africans living in Nairobi, and those able to frequently travel to Nairobi. 

Later that decade, in 1919, a London-based institution – the East Africa Currency Board replaced the Mombasa Currency Board. It was EACB’s responsibility to provide currency to the East Africa territory, thus the creation of new coins for the region. The coins were silver, with words in Latin rather than English. This strategic transition ensured that the coins (Florin) replaced the Rupee and that the Florin was convertible to the sterling. Sterling holdings also backed the Florin. 

By 1931, this premier bank offered similar services to the entire region. Account holders could access their accounts from several locations within Kenya, Uganda and Tanzania. This was so throughout the formation and growth of the East Africa Community, and later during the independence period of the three colonies turned states. The sixties, however, would be the last complete decade of the Post Office Savings Bank’s operations in the entire region. 

Decline of the EAC

At the start of the seventies, the East Africa Community’s activities began to gradually decline. By 1977 the Community collapsed and the bank transitioned to serve the Kenyan market solely. This is perhaps the time the name Kenya Post Office Savings Bank, or Postbank Kenya surfaced. 

It is surely interesting to understand the history and interconnectedness of this historical financial institution and its links to the rise of a saving culture among Kenyans. It is also worth mentioning that the Government of Kenya regulates Postbank and it reports to the Ministry of Finance. This is contrary to other commercial banks in the country which are licensed and regulated by the Central Bank of Kenya.