This archive report was first published on 29 September 2019.
On September 29, 2019, a new bill was introduced to the Kenyan Parliament, aiming to restrict the deposit and investment of surplus funds held by counties, parastatals, and constitutional commissions to state-controlled banks.
The Public Finance Management (Amendment) Bill, 2019, was sponsored by Kikuyu MP Kimani Ichungw'ah, who argued that this move would help the government track project cash and combat corruption networks that have infiltrated the public sector.
Under the proposed law, only state-controlled banks, including the Kenya Commercial Bank, Development Bank, Consolidated Bank, and Post Bank, would be allowed to hold project funds for government ministries, departments, and agencies.
The bill defines a state-owned bank as one in which the government owns or holds at least 20 percent of the share capital. The National Treasury owns significant shares in these banks, including 23.5 percent of KCB's shares and 85.8 percent of Consolidated Bank's shares.
This move comes just days after MPs approved a law that denies financial institutions the right to set interest rates, a revised form of the rate cap law that came into effect in 2016.
