The history of banking in Kenya traces its roots to early European trade on the East African coast, chiefly Zanzibar, in the later part of the 19^th century. In 1887 Sir William Mackinnon, with the endorsement of the British Foreign Office, set up what later came to be known as the Imperial British East Africa Company (IBEAC).

The formation of the IBEAC captured the attention of the National Bank of India, (NBI) which entered into agreement with the East African representatives of the merchant company, Smith, Mackenzie & Co, to act as its banking agent on the East African coast.