President Uhuru Kenyatta has refused to sign a bill intended to protect Kenyans against bank failures into law. The Speaker of the National Assembly, Justin Bedan Muturi, told parliamentarians on Thursday, February 3, that the Head of State has declined to sign the Kenya Deposit Insurance Bill, which was enacted by legislators last year.
The Kenya Deposit Insurance (Amendment) Bill 2020 sought to give a minimum deposit guarantee of Ksh1 million for accounts held in collapsed banks.According to Speaker Muturi, the President referred the Bill back to the National Assembly for review via a memorandum. Clause 2 of the Bill, which seeks to modify Section 28 of the Kenya Deposit Insurance Act, has drawn Uhuru’s ire.
The legislation aimed to reduce the time it takes for clients to be paid once a financial institution fails to six months. When a banking institution goes into receivership, the reimbursement is for a protected deposit (IR).The amendment also sought to increase from Ksh100,000 to Ksh1 million the minimum guarantee under such circumstances that a bank goes down.
“This Act may be cited as the Kenya Deposit Insurance (Amendment) Act, 2020. Section 28 of the Kenya Deposit Insurance Amendment Act, is amended by deleting the words “one hundred thousand shillings” and substituting therefore the words “one million shillings”.
“The corporation shall make the payment to a customer under subsection (1) within six months or any shorter period following the conclusion of liquidation of the institution insured,” read the proposed amendments in part.