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{
"id": 1096105,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1096105/?format=api",
"text_counter": 264,
"type": "speech",
"speaker_name": "Tharaka, DP",
"speaker_title": "Hon. George Gitonga",
"speaker": {
"id": 13491,
"legal_name": "George Gitonga Murugara",
"slug": "george-gitonga-murugara"
},
"content": "Banks went down because of political reasons. They would say, “We do not like you, we do not want your bank” and you would go under. Eventually, conmen came in and were able to set up banks. They took deposits and fled with them. That is why the Deposit Protection Fund was established. Interesting enough, the Deposit Protection Fund was supposed to turn around and revive collapsed banks. I speak in confidence because I used to practise for some of the collapsed banks at the Deposit Protection Fund itself. It is evident that none of the banks ever recovered, and none of them was revived. Despite the fact that we were making recoveries, some of the debts were going concerns. They were good debts yet none of the banks was revived. That is possibly why in 2012, it became important to have an insurance corporation to take care of deposits, on behalf of depositors. It is a very good idea. This is because as I deposit my money with anybody, including the rest of the banks, I am taking a risk because that money may go for good. Therefore, it was important and crucial to have an insurance taking care of such deposits. I am aware that the KDIC is funded by some premiums paid by the banks, which are recovered from depositors. The Leader of the Majority Party said that we have to appropriate most of the money if we are to increase what is to be recovered by depositors. We also need an explanation as to what happened to the premiums that we pay to this corporation. Therefore, as we speak to this Bill, Hon. Dawood, I think you should take part and convince Members to pass the Bill. If the Leader of the Majority Party feels it should not be signed into law, it is up to him. He knows where to go and what to do. However, let us pass this Bill with a view to protect Kenyans who deposit their money with small banks. There are advantages to this because we encourage people to deposit their money with smaller banks, which means they will grow and become international banks. We are also encouraging people not to keep their money under mattresses because they are sure that in spite of their small savings, if a bank goes under, they will make some recovery. The Leader of the Majority Party has told us that the Regulations have moved up the figure from Kshs100,000 to Kshs500,000 but of course he was shy to tell us who funds the increment. If what he said is true, who funds the increment? Whoever funds the increment can also fund the increment being proposed by Hon. Dawood. Most importantly, and this is crucial; the Kshs500 million is anchored in the Regulations that arose from the subsidiary legislation, and we know what happens to subsidiary legislation and its force of law when it comes to implementation. This can be altered through repeal and that will be the end of the Kshs500,000 provision. Let us, therefore, move as proposed by Hon. Dawood and make a substantive amendment to the Kenya Deposit Insurance Act, which is the principal law that we are dealing with today. The spirit and letter of the proposed amendment is agreeable. Hon. Dawood has given us the comparison. We seem to be lagging behind. What is Kshs100,000 or Kshs500,000 today? Let us increase this figure to Kshs1 million and after a short while, we move it to Kshs5 million or Kshs10 million. This is because we want people to be encouraged to save their money with the banks. We also want banks to take deposits so that they can grow and in the process we are able to turn around the economy. Hon. Dawood, I support this because to me, it is for the benefit of the hustlers in the country – the people who are down the pyramid, whom we should be removing from the pyramid schemes and taking care of in a manner they will feel they are also able to have their money protected. With those remarks, I support the Bill. I urge the House to pass it. If the Leader of the Majority Party is not happy with it, he knows what to do. 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."
}