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{
    "id": 1096090,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1096090/?format=api",
    "text_counter": 249,
    "type": "speech",
    "speaker_name": "Kipipiri, JP",
    "speaker_title": "Hon. Amos Kimunya",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": " Thank you, Hon. Temporary Deputy Speaker. I rise to concur with the Committee in urging the House to, unfortunately, reject this Bill. I appreciate the input by Hon. Dawood. It is, indeed, important to balance the solution to your problem with the potential risks that that solution could bring and create a bigger problem. For example, if you are having headache, you do not want to take an overdose of medication that could bring further complications than the headache you want to cure. The first thing is to appreciate that the Bill is attempting to increase the limit from Kshs100,000 to Kshs500,000. By 28th August 2020, this limit was already increased officially through a Gazette Notice to Kshs500,000. So, let us start from there. The amount that is protected has already been increased through regulations to Kshs500,000. First of all, it is a very recent review and it took into account the amount of money that the Kenya Deposit Insurance Corporation has at its disposal and the experience that we have gone through. So, increasing it to Kshs500,000 is already a very current move. It may be too soon to then start reviewing the amount upwards without looking at what the implications of doubling that amount would be. We are talking of Kshs130 billion that they have. So, if we now raise it to Kshs1 million and increase the number of risk takers who put their money into smaller banks on the false assumption that they are now protected... The potential exposure has been calculated by the Kenya Deposit Insurance Corporation who appeared before the Committee, at Kshs950 billion. This is not money that will come from the depositors. This is money that will have to be appropriated by this House. So, we are putting the whole country at risk through encouraging some risky behaviour in terms of telling people that they can now put their money into small banks because they will get up to Kshs1 million back. We all know the role played by financial institutions in this country, and Hon. Dawood gave us a history of some of the banks that failed. However, it is the intention of the Kenya Deposit Insurance Corporation to stop banks from failing or protect the small depositors who find themselves in these situations because they thought that a bank was good, but unfortunately, the bank fails. So, at least, let them get something back. Deposit insurance is not meant to protect the big savers. It is for the small savers who do not have full information in terms of analysing where they are putting their money hence end up being like wood. For instance, when there is a new bank, they may just put their money there, after which the bank fails and they collapse. Going back to history, deposit insurance was started in the United States of America (USA) way back in 1934. This was as a result of so many failures following the 1930 great depression. That depression created failures in banks and it was nothing to do with the behaviour of the banks themselves. People ended up losing their monies like it happened in 2008. If you look at our The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}