MPs summon CBK boss Patrick Njoroge on new banking law
CBK Governor Patrick Njoroge with Bank Supervision Department Director Gerald Nyaoma during the Finance committee's meeting on the status of the implementation of banking regulations, February 26, 2019. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
- The MPs say that his failure to publish the banking regulations is in contempt of Parliament.
- The committee wants the CBK boss to explain why he has ignored the provisions of the Finance Act.
- Dr Njoroge has warned that relaxing money laundering and terrorism laws will frustrate the war against graft.
Central Bank of Kenya (CBK) governor Dr Patrick Njoroge is today expected before the National Assembly Committee on Implementation.
Dr Njoroge is expected to explain why he has not published the banking regulations required to implement the Banking Act even as MPs mull his removal.
The MPs say that his failure to publish the banking regulations, which prescribes customer deposits and withdrawals as provided for in the Banking Act as amended in August last year through Finance Act, is in contempt of Parliament. This, the legislators say, is a reason enough to send the CBK boss home.
The committee chaired by Narok North MP Moitalel ole Kenta wants the CBK boss, who was appointed in June 2015 for a renewable term of four years, to explain why he has ignored the provisions of the Finance Act.
The Act passed in August last year mandates the CBK boss to publish the regulations and submit them to the National Assembly within 30 days of its coming into force for consideration in line with the Statutory Instruments Act.
SIX MONTHS
But six months down the line, Dr Njoroge is yet to comply with the law.
“What this man [Dr Njoroge] is doing is to undermine the authority of Parliament and the Executive. The President assented to this law. He [Dr Njoroge] should resign because he has no confidence in the authority of this House,” Mr Kenta said.
He added: “This House does not act in vain and must be respected.”
Though the President has the powers to renew the governor’s second term without the input of the National Assembly, the MPs have vowed to make his reappointment difficult.
Dr Njoroge says that as it is, the law cannot be implemented. He has warned that relaxing money laundering and terrorism laws will frustrate the war against corruption and cut off Kenya’s banking sector from the best practices in the global banking system.
AMENDMENT
“The adverse effects of the amendment on the banking sector, would be immediate termination of relationships by foreign correspondent banks and closure of accounts of Kenyan banks,” Dr Njoroge said when he appeared before a House committee last month.
Instead, Dr Njoroge has issued guidelines, which have since been dismissed by MPs as illegal, to the banking industry. Rarieda MP Otiende Amollo said that only Parliament can make laws.
“The governor’s action is nothing short of contempt of Parliament. He is treading on very dangerous grounds because he is failing to obey the law. This House should consider removing him,” said Dr Amollo who also added that the legalities of laws are tested in court.
House Speaker Justin Muturi said: “Because those who tried to challenge the implementation of the law did not get conservatory orders, the law is in force as we speak.”
BLACKLISTED
When he appeared before the House Committee on Finance and National Planning three weeks ago, Dr Njoroge, said that Kenya will be in danger of being blacklisted by international bodies like Financial Action Task Force (FATF) in its global financial operations.
Last week, the House committee on Finance and National Planning chairman Joseph Limo (Kipkelion East) - faulted the CBK boss saying he has no authority to choose which sections of the laws passed by the House to implement.
“The CBK boss has implemented the law to suit their own interests. The nature of guidelines issued by CBK in form of circulars are illegal and cannot be used in a court of law. The
Governor continues to mislead the public that the implementation is opening the banking sector to fraud,” Mr Limo said in a statement he presented to the House on Tuesday.
RATIFIED
But even as this happened, Uasin Gishu Woman Representative Gladys Shollei, who chairs the Committee on Delegation warned Dr Njoroge that he could not hide under international conventions that have not been ratified by Parliament to circumvent the implementation of the law.
“We have summoned him [Dr NJoroge] to appear before our committee to give a status updates on the regulations,” Ms Shollei said.
