Rules to tame banks get MPs’ green light
Parliament in session. Photo/FILE
What you need to know:
- House resolves to push for opening up of Central Bank governor post and that of the deputy
MPs have unanimously adopted a House committee report that sets the minimum fine for crimes in the banking industry at Sh20 million, up from Sh1 million.
The lawmakers also resolved to push for amendments to the law to open up the post of Central Bank governor and that of the deputy to competitive recruitment.
They also unanimously resolved that the Auditor-General and the Ethics and Anti-Corruption Commission carry out a forensic investigation on the books of 12 commercial banks that are accused of fanning the rapid depreciation of the shilling.
The audit, according to the House resolution, should focus on the “operations and transactions of the Discount Window and foreign exchange trading” which had “the largest foreign exchange holdings by September 2011”.
The banks, whose books the Auditor General and the CBK Bank Supervision department will look at are CFC Stanbic, KCB, Standard Chartered, Citibank, Barclays, Commercial Bank of Africa, I&M, Diamond Trust Bank, NIC Bank, Equity Bank, Cooperative Bank, and Bank of Africa.
The debate that led to the adoption of the report lacked the emotional venom that clouded the initial back and forth over the committee report.
This is because the MPs deleted a call for CBK governor Njuguna Ndung’u to resign and a consequent petition for the President to form a tribunal to investigate the governor’s efficiency at the height of the crisis.
An investigation into the CBK window may also rope in Prof Njuguna, who was at the helm of the bank, but whom MPs have sought to protect.
The Capital Markets Authority, the House resolved, should also look at the Nairobi Securities Exchange to dig out “suspect capital inflows and outflows” and report to Parliament within 90 days.
Shilling decline
The far-reaching resolutions came as the MPs wound up debate on the report of the ad hoc committee on the rapid decline of the shilling, in a debate presided over by temporary deputy Speaker Ekwee Ethuro.
The call from the august House is that the banks have to reduce the interest rates to “affordable rates” within 90 days, from the current rates of 30 per cent.
It came on the day that MPs promised a gruelling battle against banks over the interest rates, and just a day to the re-tabling for amendments of the Finance Bill, 2011, in the House.
All these resolutions, according to the MPs, have to be included in the Finance Bill.
