Entry Instance

HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept

{
    "id": 728671,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/728671/?format=api",
    "text_counter": 144,
    "type": "speech",
    "speaker_name": "Mr. Henry Rotich",
    "speaker_title": "The Cabinet Secretary for the National Treasury",
    "speaker": {
        "id": 13142,
        "legal_name": "Henry Rotich",
        "slug": "henry-rotich"
    },
    "content": "conveniently using their phones. The banking sector remains largely profitable with capital adequacy and liquidity ratios above the recommended thresholds, thus giving assurance to Kenyans that their money is in safe hands. Over the last one and a half years, some commercial banks experienced challenges and were put either under statutory management or liquidation. Following this and the emergence of new financial risks in the sector, the Central Bank of Kenya (CBK) adopted abroad surveillance strategy to stabilise the sector around three pillars: (i) Increasing transparency on shareholding; (ii) Strengthening banks corporate governance; and (iii) Ensuring banks adopt effective business models that will ensure resilience. Further, the CBK has continued to strengthen its supervision of the industry by: (i) Increasing its supervisory staff component; (ii) Working closely with international partners to enhance supervisory staff capacity; and (iii) Rolling out onsite risk-based Anti-Money Laundering and Combating Financing of Terrorism inspections for commercial banks and micro-finance banks. Hon. Speaker, the implementation of the Banking (Amendment) Act 2016, on capping interest rates has reduced the bank lending rates, and increased deposit rates offered to savers. The maximum lending rate now stands at 14 percent while interest earning deposits are now remunerated at 7 percent. To progressively reduce the interest rate spread, we shall continue to implement reforms in this sector that were adopted under the Committee on Cost of Credit that I chaired in 2014. Together with the Kenya Bankers Association and the CBK, we are undertaking a comprehensive assessment of the impact of the interest rate capping law, to assess its impact on credit expansion to the private sector which has slowed down from double digit levels a year ago to single digit levels, and the perceived impact on economic growth. The assessment will inform any intervention measures to be taken to ensure credit availability to the consumers. The Government remains committed to address the high cost of credit and expand access to credit in the economy. To this end, the Movable Property Security Rights Bill, 2016, recently approved by the National Assembly, should facilitate lower lending rates as it provides for borrowing using movable assets. The Nairobi International Financial Centre Bill was approved by the Cabinet in December, 2016, and has been submitted to the National Assembly for approval. The enactment of this bill will kick start the establishment of the Nairobi International Financial Centre to position Nairobi as an international financial hub. The Financial Services Authority (FSA) Bill, which proposes to merge all non-bank financial sector regulators, is currently undergoing legal drafting, and I will soon be submitting it to this House for approval. Islamic financing arrangement is becoming a major source of funding development expenditures worldwide. This financial arrangement is getting integrated within the global financial system and has the potential to boost prosperity and raise the standard of living of our people. Kenya intends to maximise its comparative advantage and position itself as a regional hub for Islamic financial products, in order to attract foreign direct investment. I will, therefore, propose legislative amendments to the Capital Markets Act, the Cooperatives Societies Act and Sacco Societies Act to facilitate shariah-compliant financial products. In addition, I intend to amend the Public Finance Management Act to provide for issuance of Sukuk bond as an alternative source of financing our development projects. I also intend to amend the tax statutes to provide for equivalent tax treatment of these new financial The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}