Members of Parliament have threatened to block the reappointment of Central Bank of Kenya (CBK) Governor Patrick Njoroge, accusing him of imposing his own “regulations” on the banking sector, which, they claim, have stifled liquidity in the economy.
Dr Njoroge was appointed for a four-year term in June 2015 after vetting by the legislators
Although the CBK Act allows reappointment of the governor for a second term, the MPs have vowed to show him the door.
For instance, one cannot withdraw more than Sh1 million a day or make big deposits without attracting the hawk-eyed Financial Reporting Centre, which is responsible for to detecting and reporting such transactions.
FINANCE ACT
The governor is also accused of using circulars and memos to regulate banking rather than through regulations that must be approved by the National Assembly.
This comes even as the MPs prepare for a session with him on Tuesday on the status of the CBK regulations, and why he has not honoured invitations to appear before the National Assembly’s Finance and National Planning committee.
In 2018, MPs passed the Finance Act, which requires the CBK boss to publish regulations governing the banking industry within 30 days of their coming into force.
CIRCULARS
Almost six months down the line, there are no regulations before the House, prompting Suna MP Junet Mohamed, who is also the Minority Whip, to seek the intervention of House Speaker Justin Muturi.
“What the CBK Governor is doing in the financial sector is unacceptable and illegal. You cannot just wake up one morning and do something irregular in the form of a circular to the financial sector.
“His term is coming to an end in March. This House should not renew it. We must deal with him,” Mr Junet said, adding that the circulars have made it mandatory to fill forms whenever “you want to appropriate your own money”, making most Kenyans resort to “pillow” banking.
Mr Duale said the rules “should not make it so difficult for people doing genuine business because he has turned banks into documentation bureaus”.