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"id": 269589,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/269589/?format=api",
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"type": "speech",
"speaker_name": "Mr. Keynan",
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"speaker": {
"id": 41,
"legal_name": "Adan Wehliye Keynan",
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"content": "Mr. Speaker, Sir, first of all, I would like to take this opportunity to clarify a number of issues that have been deliberately distorted, just to mislead Parliamentarians and also the Kenyan public. This relates to the issue of discount window. I know that later on, a respected former Central Bank of Kenya (CBK) banker, and also a Member of Parliament, who will second this Motion, will also dwell on this particular issue. But the issue of discount lending per se is not illegal. But what happened? At that particular time, the counter-lending, first of all, was the last resort lending facility by CBK. The circumstances that warrant any financial institution to visit that facility are three. Mr. Speaker, Sir, first, the particular institution must be in a dire financial strain. Two, there must be nationally acknowledged liquidity crisis which, again, must be within the confines or province of the regulator. The last one, which is very unlikely, is to visit the facility simply because it is there for profiteering purposes. In our context, and I want to confirm for purposes of record, indeed, the amounts borrowed from the discount window for the year 2011 for 12 banks out of 43 banks – and I will name the banks - indeed, totaled to Kshs600,000,189,000. This is not a fallacy. For the whole of 2010, the same is Kshs11,000,112,000. This is documented and factual. These are records from none other than the regulator, CBK. Mr. Speaker, Sir, the banks are divided into three categories; the big banks locally, the international banks, the medium banks and small banks. Again, the issue we ought to ask ourselves as citizens of the Republic of Kenya is: What liquidity crisis did Kenya Commercial Bank, Barclays Bank of Kenya, Stanbic, Standard Chartered, Equity and many other banks experience that warranted them to visit that facility without any control by CBK? If that question could be answered! Whose work was it? If these questions are answered, then this issue of Kshs600 billion or it did not happen will not arise. The fact is that, that facility was visited. It is not one day thing. A bank would visit that facility today and borrow Kshs2 billion. Tomorrow, another one would come and borrow Kshs10 billion. The next day--- In total cumulatively for the year 2011--- This is not a fallacy or fiction. It is a reality and it is within CBK. It is in the documents that they gave us, and which forms part of the Report. What prompted this? Where was the regulator? The import of this is high inflation. That money is something that the market could not accommodate. Therefore, it means that the Kshs600 billion and other monies that were given to those particular banks, in economic terms, is paper money which has no value. That is not something that the economy can accommodate."
}