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{
    "id": 959697,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/959697/?format=api",
    "text_counter": 101,
    "type": "speech",
    "speaker_name": "Suba South, JP",
    "speaker_title": "Hon. John Mbadi",
    "speaker": {
        "id": 110,
        "legal_name": "John Mbadi Ng'ong'o",
        "slug": "john-mbadi"
    },
    "content": "Parliament that passed this law, it was not sued. Instead, Oduor sued the CBK and the Attorney- General as respondents. In fact, the Kenya Bankers Association, the Consumers Federation of Kenya (COFEK) and the National Assembly decided to go to court as interested parties. The defence given by the CBK supported the Petition yet they were the respondent in court. The Attorney-General put up a poor show in court. Therefore, it is clear and evident that the person who went to court is not Boniface Oduor, but the CBK. Why would an institution created by law go to court disguising itself as an individual to challenge an Act of Parliament? I would call this for what it is, namely, a public deceit and an attempt to defeat justice. We need to tell the CBK that we came up with this law because of its failure to regulate the financial sector. If the CBK was effective and efficient in regulating the financial sector, there would be no need for this law. This is where I want Members to pay attention and be keen because this has been misreported. The misreporting was that the courts annulled or said that this law is unconstitutional and, therefore, we are likely to go back to the former unregulated interest rate regime. That is not true. I thank the Judiciary for rejecting and refusing to accept the argument by the petitioner to annul this law to take us back to where we came from. In fact, the only thing that the courts did was to ask Parliament to clarify some ambiguities in this legal provision, which I agree to entirely as I will shortly explain. The Judiciary, therefore, asked us to amend mostly Section 33B of the Act. The following is what the court pronounced itself to and what Hon. Jude Njomo wants corrected. Section 33 B of the Act states that a bank or a financial institution shall set the maximum interest rate chargeable for a credit. That is where the issue is. The courts found ambiguity in our asking that there should be a maximum interest rate without defining the period. The courts have asked us to define the period and we are saying that it should be an annual maximum interest rate. If you just leave it open, some mischievous characters may decide to charge the 4 per cent interest rate daily, hourly or yearly. Now we will be very clear in this law and that is what Hon. Jude Njomo is trying to do. A bank or a financial institution shall set the maximum annual interest rate charges. We are adding the word “annual” so that we do not leave it ambiguous. The other words that are being changed are from „credit facility‟ to „loan‟. The Act contains the word „loan‟ consistently in its usage. The amendment that Hon. Jude Njomo had initially introduced, which is now in the law, is the phrase „credit facility‟. Firstly, the phrase „credit facility‟ was found to be ambiguous and, therefore, the court asked us to clarify it. We are now bringing clarity by reverting to the word „loan‟, so that it is consistent with the Act."
}