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{
    "id": 200855,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/200855/?format=api",
    "text_counter": 268,
    "type": "speech",
    "speaker_name": "Mr. Kajwang",
    "speaker_title": "",
    "speaker": {
        "id": 164,
        "legal_name": "Gerald Otieno Kajwang",
        "slug": "otieno-kajwang"
    },
    "content": "Mr. Temporary Deputy Chairman, Sir, I beg to move:- THAT, Clause 68 be deleted Mr. Temporary Deputy Chairman, Sir, the amendment seeks to strike off the proposed amendment to the Banking Act for the following reasons: When the NARC Government took over power, I remember the first statement of the Minister in this House was to raise the capital base of the banks to Kshs400 million from around Kshs250 million. I am not sure whether it was Kshs200 million or Kshs250 million. Because of that, a bank called Daima Bank - I remember this very clearly - which was doing its business largely in Machakos Town, collapsed because it could not increase its capital base from Kshs200 million to Kshs400 million. It was put under statutory management. I remember that one of the shareholders of that bank is a Member of this House. One year later, the Minister actually reduced the capital base for banks from the proposed Kshs400 million to Kshs250 million. It was intended that small banks also have a stake in this business; that small is not bad and that small does not mean insolvency or instability! We all applauded that. Mr. Temporary Deputy Chairman, Sir, some banks, which were in the range of Kshs200 million and Kshs250 million, of course, later on grew to have Kshs400 million or Kshs500 million in their capitalization. This year, the Minister decided that, in fact, they should grow to Kshs1 billion in progression from Kshs400 million, Kshs750 million to Kshs1 billion. Mr. Temporary Deputy Chairman, Sir, I looked at the Minister's Statements which said that the only reason he was raising them to Kshs1 billion is that the banks are not complaining because the small people can deal with the microfinance institutions which now do business with a capital up to Kshs60 million. I, however, know that microfinance institutions of that type do not do banking business. They do not transact international business. Mr. Temporary Deputy Chairman, Sir, the question I am asking the Minister is this: Why are we wiping small banks from doing business in this country? Somebody might start a bank for the Patels only and it could help them as a community. Somebody might start a bank for the Sikhs only and it could help them as Sikhs. Why are we forcing them to merge, say, the Patels and the Sikhs to have a bigger bank? Is this not a conspiracy of big banks to wipe out small banks? Who said that if you have a capital base of Kshs200 million, you are likely to collapse?"
}