The Finance Act decrees the Central Bank of Kenya (CBK) Governor Patrick Njoroge to publish regulations on banking transactions and submit them to the National Assembly within 30 days of it’s coming into force for consideration.
More than six months down the line, publication of the law on banking regulations was not executed, a concern that vexed Members of Parliament. MPs termed his failure to publish the banking regulations as provided for in the Banking Act, which was amended in August last year through the Finance Act, was contemptuous of parliamentary proceedings and reason to sack him.
Dr. Njoroge finally gave in to the demand from MPs to publish banking regulations prescribing customer deposits and withdrawals after months of exchanges and threats to have him ejected for undermining the authority of Parliament and the Executive.
On Tuesday, CBK Boss was to appear before the House committee on Implementation to explain why he had failed to publish the regulations and instead opted to issue guidelines in form of memos and circulars to the banking industry, which MPs termed as illegal.
“We are in the process of implementing section 65 of the Finance Act, 2018 and we are currently consulting the Committee on Delegated Legislation. In line with these consultations, we are unable to appear before you and we are seeking two weeks,” Dr Njoroge told the committee in a written apology.
Appearing before the committee last month, in his defence, CBK Boss said the law could not be executed as it comparable to slackening money laundering and terrorism laws that would deflate fight against corruption and cut off Kenya’s banking sector from the best practices in the global banking system.
“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,” he said.