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{
    "id": 944517,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/944517/?format=api",
    "text_counter": 43,
    "type": "speech",
    "speaker_name": "Hon. Speaker",
    "speaker_title": "",
    "speaker": null,
    "content": "His Excellency the President has expressed reservation to Clause 45 of the Bill which relates to capping of interest rates chargeable on loans advanced by banks and other financial institutions. In his Memorandum, His Excellency the President highlights several factors that have necessitated the proposed amendment to Clause 45 of the Bill, which seeks to amend the Banking Act (Cap.488) by repealing Section 33B so as to remove capping of interest rates chargeable on loans. These include the following: (i) The reduction of credit to the private sector, particularly Micro, Small and Medium Enterprises (MSMEs); (ii) The decline in economic growth; (iii) The weakening of the effectiveness of Monetary Policy; (iv) The reduction of loan advances by banks; (v) The mushrooming of shylocks and other unregulated lenders in the financial sector; (vi) The withdrawal of banks’ lending to specific segments of the market; (vii) The increase in average loan size, reflecting lower access by small borrowers and larger loans to more established firms; and, (viii) The decreased diversity of loan products. Consequently, the President recommends an amendment to the said Clause of the Bill so as to resolve the above concerns. Hon. Members, the Reservation of the President, as contained in his Memorandum, now stands committed to the Departmental Committee on Finance and National Planning for consideration. Standing Order 154(2) requires the House to consider the President’s Reservations within twenty one (21) days upon receipt of the Memorandum. In this regard, the Committee ought to table its report soonest to allow the House to consider the President’s Reservations within the said timeline. In considering the Reservation, the Committee is expected to additionally apply itself to the question of the commencement date of the provision and the effect of the proposed amendment with regard to existing loan contracts between lenders, that is, banks, other financial institutions and borrowers. Hon. Members, may I, at this point, remind the House of the Speaker’s Communication delivered on 28th July 2015 concerning the consideration of President’s reservations to a Bill and amendments thereto. I particularly draw your attention to my guidance that, the voting threshold for the passage of amendments proposed by a Committee or an individual Member that have the effect of fully accommodating the President’s reservations is a simple majority as contemplated under Article 122(1), as read together with Article 115(2)(a) of the Constitution. On the other hand, an amendment that does not fully accommodate the President’s reservations, or, indeed, one that has the effect of total override of the President’s reservations, including negating his proposed text, would require a two-thirds voting threshold to be passed, in keeping with the provisions of Article 115(4) of the Constitution. I wish to further reiterate that only the specific clause of the Bill that has reservations, namely Clause 45, ought to be considered. I now direct the Clerk to circulate the Memorandum"
}