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{
    "id": 267520,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/267520/?format=api",
    "text_counter": 481,
    "type": "speech",
    "speaker_name": "Mr. Keynan",
    "speaker_title": "",
    "speaker": {
        "id": 41,
        "legal_name": "Adan Wehliye Keynan",
        "slug": "adan-keynan"
    },
    "content": "Mr. Deputy Speaker, Sir, again, I want to urge Mr. Kimunya to take time and read the report. As I said, he is distorting facts and the whole country is watching. I said I was comparing 2010/2011. Let him not change the facts because Kenyans are watching. I know and as somebody said there are interests, but allow me to complete. As we did this, we realized that there are quite a number of banks who flouted the CBK guidelines. The Governor, in his own wisdom of the financial institution, did not take any action. We realized that during this period there was an increase of foreign exchange trading by different banks. Those who are familiar with financial issues can clearly get what that meant. Because of this, commercial banks decided to hold the whole nation at ransom. For comparison purposes, I want to read something. I want to read the profit margins that the banks made during the later period of 2011 as compared to what they borrowed. Kenya Commercial Bank (KCB) in 2010, their profit margin was Kshs6.5 billion. In 2011, their profit was over Kshs10 billion. That is an indication of how they benefited from this trading. Standard Chartered Bank in 2010, their profit was Kshs6 billion. In 2011, their profit was Kshs7.6 billion. Barclays Bank in 2010, their profit was Kshs8.7 billion. In 2011, their profit was over Kshs10 billion. The same applies to Stanbic Bank and all other commercial banks. The reasoning is that the more they borrowed from the discount window, the more they manipulated foreign exchange with the connivance of the very regulators who were supposed to protect the Kenyan taxpayers; the more profit they made. If this does not constitute economic crimes against the people of Kenya, I do not understand it. Again, if you look at what happened, there is an institution called the Baren Bank in Ireland. That particular bank was allowed in the mid 1990s to arbitrarily engage in similar activities like these. That calls for regime changes. The entire leadership of South East Asia was wiped out because of high interest rates. We are lucky because whenever such issues arise, we go back to our tribal cocoons and our regions in the name of protecting our own. That has cost an interest rate of 30 per cent today. Even Greece which of late has had very serious economic crisis, the interest rate remains at 6.5 per cent. Could we compare the same to 30 per cent? It is because of this trading. If the Governor would have acted prudently, this issue would not have arisen. As a result of this, there is a crisis in the mortgage industry. The salaries of the entire middle class have remained the same. Interest rate has skyrocketed almost by four times. Who will assist these Kenyans? There is a particular Kenyan I want to mention who works for one of the parastatals whose salary is Kshs170,000. This particular Kenyan had a mortgage of Kshs72,000 while the interest rate was 9 per cent. The interest rate changed from 9 per cent to 29 per cent in that particular bank where he has a mortgage. Out of the blues, that person was asked to service a mortgage of Kshs188,000 against a salary of Kshs170,000. Is that person not a candidate for suicide? Is that Kenyan not in serious financial trouble? These are the issues that we must raise. I do not see any other group with legitimacy other than the elected representatives to put this thing to order so that the Government of the day can protect the savings, properties and everything owned by Kenyans. Mr. Deputy Speaker, Sir, there are a number of issues on this particular phenomenon which have come to our attention as a Committee. We interacted with the Kenya Bankers Association. One of the things that they said is that they have a problem with the way the bank is managed. We also interacted with the Ministry of Finance. We realized that there was total communication breakdown between the CBK and the Ministry of Finance. There was a lot of capital freight because it was free for all. Anybody could do anything in the name of a liberalized"
}