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{
    "id": 1508175,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1508175/?format=api",
    "text_counter": 145,
    "type": "speech",
    "speaker_name": "Kikuyu, UDA",
    "speaker_title": "Hon. Kimani Ichung’wah",
    "speaker": null,
    "content": "Hon. Samuel Atandi sits on the Departmental Committee on Finance and National Planning. He is a former banker. He will tell you that the National Bank, where he used to work, was on the verge of collapsing because of capital inadequacy, mismanagement, and outright theft of public resources. Encouraging banks to merge so as to have more capital will mean that they are more likely to survive the tides of the times than when they are less capitalised. Those who have interacted with the Report will see that the Departmental Committee on Finance and National Planning has indicated that they will amend the provisions to give a timeline of, at least, seven years, so that the capital adequacy is not increased immediately thus becoming a shocker to the industry. They have proposed amendments to give banks seven years. During the first three years, banks should be able to increase their capital to, at least, Ksh5 billion. I was just looking at the statistics. Only six banks in the country are below the capital threshold of Ksh5 billion. It is only those banks that will be required to raise their capital threshold within the next three years; not immediately. It is important to note that because I had seen a lot of talk on social media that the Government wants to close banks or force them to merge. All we are saying is that those six banks that have a capital threshold of below Ksh5 billion have three years to transition and increase their core capital. We have another 18 banks that have a capital threshold of between Ksh5 billion and Ksh9 billion. They also have three years to move towards a core capital of Ksh10 billion. Another 24 banks are on the verge of attaining a core capital of Ksh10 billion and above. Therefore, there are 24 banks that need to move up. We are giving them three years to get to a core capital threshold of Ksh5 billion, another two years to get to Ksh8 billion, and the last two years for everybody to get to a Ksh10 billion core capital threshold. They will have adequate time to mobilise resources. Some have already begun. I have seen a rights issue by the Housing Finance Bank, which was a mortgage finance company, but is now involved in retail business for banking. I will quickly speak on other provisions. Clause 3 touches on the capital adequacy of the banks. Clause 4 seeks to amend various provisions of Section 2 of the Central Bank of Kenya (CBK) Act Cap.491 to allow to regulate all forms of non-deposit taking credit business. Part VIC of the current CBK Act…"
}