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{
    "id": 786424,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/786424/?format=api",
    "text_counter": 16,
    "type": "speech",
    "speaker_name": "Hon. Ng’ongo",
    "speaker_title": "",
    "speaker": {
        "id": 110,
        "legal_name": "John Mbadi Ng'ong'o",
        "slug": "john-mbadi"
    },
    "content": "Thank you, Hon. Speaker. I will comment on this second Petition by Hon. Jude Njomo. I am sure Members will remember that sometimes in the 90s, the collapse of banks in this country was the order of the day. Hon. Speaker, we discussed seriously that we did not have strong legal framework to help banks stand on their feet and especially those which are faced with financial distress. However, the 11th Parliament did justice to Kenyans by passing the Insolvency (Amendment) Bill 2017. It was our expectation that with this law, the CBK would have the legal framework and machinery to help out these struggling institutions. We know that there are two ways through which a bank can be forced into struggling. One is by normal financial distress which may be caused by management mistakes. There is also the case where the management subjects banks to this kind of financial distress by purely defrauding the people of Kenya. That is what has happened in the case of Chase Bank and Imperial Bank. Hon. Speaker, investors put money through their banks trusting that it is safe for their own use. However, when you put your money in the bank, it can lead to financial collapse and economic collapse of the country if people lose confidence in banks. It is important that if the CBK cannot discharge their supervisory role properly, then this House should come in to try and understand what the problem is. Once a bank in a financial distress is put under statutory management, one would expect almost the same outcome. Rarely in Kenya would you find a financial institution that has been put under statutory management coming back to life. Most of them from statutory management go to receivership, liquidation and that is hurting Kenyans so much. I appeal to the Departmental Committee on Finance and National Planning and the Departmental Committee of Trade, Industry and Cooperatives to look into this matter and get clear evidence and representation from CBK to tell us what their problem still is. They were crying and complaining of the legal framework and we gave them. They have not complained that the law is not sufficient for the CBK to be able to discharge its duty. As I conclude, the Governor of the CBK has been hailed as a performing Governor. I think he even got an award on the same. We want to see his capability and capacity by helping these banks come back to life. That is when we will know that he is discharging his duties efficiently and effectively. Thank you, Hon. Speaker."
}