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{
    "id": 237483,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/237483/?format=api",
    "text_counter": 200,
    "type": "speech",
    "speaker_name": "Mr. Billow",
    "speaker_title": "",
    "speaker": {
        "id": 260,
        "legal_name": "Billow Adan Kerrow",
        "slug": "billow-kerrow"
    },
    "content": "Mr. Temporary Deputy Speaker, Sir, the Government is listening for him. The point I am making, with due respect to what Mr. Speaker has said, is that with regard to the vettting of bank officials, which is an important provision, the main problem is enforcement. The CBK officials do not often really restrict themselves to those qualities that are required. You will find people who have failed banks before being appointed as the directors. That is why you find a lot of these problems we are having in the banks. This is why we have seen problems in our banking sector. We have seen the CBK give them reports regularly. He knows very well, as most of us do, that there are dozens of banks which are involved in money laundering and tax evasion. These reports are given to them regularly. So, I think the reasoning is because the quality of the people who are running these banks is not the best. This is why I am happy that he was able to introduce requirements for professional and moral qualities. However, I think the issue of 3270 PARLIAMENTARY DEBATES October 31, 2006 enforcement is something that he needs to look at very seriously. Some banks are run very well and there is no doubt about that. We have to mention indigenous banks that are being run professionally. In this regard, I want to specifically mention a bank like Equity Bank. I feel very proud when I read about it; that it is one of the fastest growing banks with one of the highest turnovers. There are banks which are run very well in this country. However, there are also banks which are there merely for the purpose of syphoning money out of the country. We know it very well! I think the Minister needs to deal with this matter so that we do not have the kind of problems we had in 1996 when over 36 banks collapsed in one single year because of all manner of reasons. Mr. Temporary Deputy Speaker, Sir, there is also the issue of the Chairman of the CBK. Under Section 55, the Minister is introducing the appointment of a chairman of the board by the President. I find this absolutely unacceptable. We have discussed this matter at many fora. I think this is not only unacceptable, but it is absolutely unnecessary. The board of the CBK is not just like a board of any other corporate entity. Here, it is the issue of corporate governance. The CBK Board has one fundamental responsibility of monetary policy. It is to determine the monetary policy of the country. It is not like the other corporate entities which deal with personnel matters and other issues so that you have to get an independent chairman from the chief executive. I think we are mixing issues. In countries, like the UK, where there is a chairman of a board of a CBK, it is because there are two separate responsibilities. The monetary policy is strictly headed by the governor, and other mundane issues of the bank; staffing and other issues of the bank which another chairman or somebody else can run. However, I think in our case of the board of the CBK, which is the one that is dealing with the monetary policy and everything, it is important that we have the Governor retained as the chairman. It does not really make a lot of sense to have somebody else appointed by the President. What will happen is that the independence of the Governor, which is provided for in the Constitution, will be undermined. If the independence of the Governor of CBK is undermined, then what will happen is that tomorrow that chairman can give directions: \"We need Kshs1 billion to be printed!\" He is the chairman of the board appointed by the President and he can direct the Governor in the board meeting to print money. We should remember that all the directors of the board are also appointed by the President. He can direct: \"We need money printed!\" What is the Governor going to do? So, it is important that we leave the Governor to be as independent as possible. We have had that situation for many years, and we have never had a problem. Why are we having a problem today with the Governor? If the Governor is not performing his duties effectively, the Constitution provides for a tribunal to be set up, so that he can be dealt with. Therefore, the suggestion contained in this Bill in not necessary. I think we are trying to circumvent the provisions of the Constitution regarding the independence of the Governor by appointing somebody as the chairman. I think we will see in this country---"
}