Recently the Government has announced its plan to close its deposits in commercial banks.Citing a number of reasons for its intention which includes; One-To reduce finacial burden and, Two- The banks were using the same Returns on the deposits to buy Treasury bills on which, the Government repays colossal amount of interest.

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The proposal by the Government has for sure wreaked a high voltage shock to commercial banks having huge deposits from that end. I think on one side of the coin, the Government is right.Most of the Government deposits are in the form of Current Accounts. With this kind of account, the government get no consideration for its deposit other than security and ease means of paying its customers. Here the banks are the winner.

But on the other side of the coin, I would propose that the Goverment come into a kind of win-win agreement with the commercial banks, through which the Governement will get some kind of returns on its deposits.These may be in the form of rebate on Treasury bills bought by these entities. Sijui mnasemaje Wabongo wezangu?

Your idea is right but who is going to monitor the proceeds from the deal? But I think the government idea will make the banks more independent as they will be free to verify the credibility of the loans applicant more especially with business tycoons politically well connected.It may also make the banks stand on their feet. [size=4][/size]