MPs issue fresh threats to CBK boss on Sh1-million rule

March 6, 2019 - 5 minutes read

Parliament has threatened to initiate the establishment of a tribunal to precipitate the process of removing Central Bank of Kenya (CBK) Governor Patrick Njoroge for failing to table regulations on the capping of the amount of money an individual can withdraw from banks.

The Legislature is accusing the CBK Governor of refusing to implement the laws passed by Parliament and hiding behind international conventions Kenya signed.

Three House Committees; the Finance and Planning Committee, the Committee on Delegated Legislation and the Committee on Implementation have all hit out at Dr. Njoroge for refusing to implement section 33(C) of the Banking Act that requires him to publish and table in Parliament regulations for implementation of the law.

The said section declared as null and void all existing guidelines and regulations on deposits and withdrawals by customers after, 14 days of the coming into force of the Banking (Amendment) Act, 2019.

Governor Njoroge when he appeared before Finance and Planning Committee, vehemently opposed MPs move to remove the Sh1 million cap on bank withdrawals saying the requirements, strikes at the heart of Kenya’s anti-money laundering law hence hampering anti-corruption efforts.

He told the Finance Committee that CBK’s circular number one of 2016 is part of the complementary efforts to enhance the effectiveness of cash monitoring.

The circular requires individuals withdrawing or depositing more than Sh1 million to fill forms disclosing the source or intended use of the money.

The CBK Governor told Parliament the war against corruption, money laundering, and terrorist financing will be significantly impaired if the requirements for cash deposits and withdrawals are weakened and that Kenya will be locked out of the global financial systems.

House Finance Committee Chair Benjamin Limo slammed Dr. Njoroge for misleading the Committee for claiming that the matter is in court but there is no order stopping him from implementing Section 33 (c).

In a statement before the House, Mr. Limo said courts cannot use such regulations to charge someone who has been adjudged to have violated the rules and that nobody other than Parliament has the power to make regulations with the force of law.

Delegated Legislation Chairperson Gladys Boss Shollei, said Dr. Njoroge has been directed to table fresh regulations governing bank withdrawals and deposits within seven days.

The Uasin Gishu County MP said   Banking Act is clear that within 30 days, the CBK governor should have submitted regulations to the Committee on Delegated Legislation.

Ms. Shollei said Dr. Njoroge cannot invoke international conventions as the said conventions are required to be domesticated by regulations or law.

The Committee on Delegated Legislation said regulations used by the CBK can be recalled for proper scrutiny, or brought back to Parliament to be annulled.

 Rarieda MP Otiende Amollo said Dr. Njoroge is in contempt of Parliament and must be thorough cautioned lest Parliament considers his removal from office by invoking Article 251 of the Constitution.

Mr. Amollo said Mr. Njoroge cannot generate laws and test the legality of the laws and not the Office of the Attorney General.

Moitalel Ole Kenta, who chairs the committee on Implementation, said Dr. Njoroge has been summoned to appear before his team on Tuesday 12, 2019.

The Narok North MP said Mr. Njoroge is undermining the authority of Parliament and the Executive as it is the President who assented to the law hence he must be held to account.

Section 33 of the Banking Act became effective on October 1, 2018, requiring Central Bank to prescribe conditions on deposits or withdrawals, prescribe, in regulations, conditions on deposits or withdrawals by customers in banks and financial institution.

It also stipulates that the Central Bank shall within thirty days of coming into force of the Act; prescribe regulations setting out conditions for deposits and withdrawals by customers in banks and financial institutions in accordance with the Statutory Instruments Act.

The laws also set out that for the avoidance of doubt no other person shall purport to make regulations required under the section and any existing guidelines or regulations prescribing conditions on deposits or withdrawals by customers shall cease to be operational within fourteen days of the coming into force of the regulations made under the section.

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