CBK Amendment Bill 2014 tabled in parliament

The Central Bank of Kenya

By Ruth Mutegi

More Kenyans are set to invest in government securities if a bill by Mukurwe-ini Member of Parliament Kabando wa Kabando is enacted into law.

The Central Bank of Kenya Amendment Bill 2014 seeks to compel the Central Bank to lower the minimum denominations for public debt instruments.

Currently, Kenyans are required to invest at least 50,000 shillings in public debt instruments such as treasury bills and bonds.

This according to Mukurwe-ini Member of Parliament Kabando wa Kabando is too high for most Kenyans.

To correct this, Kabando has sponsored the Central Bank of Kenya Amendment Bill 2014 that seeks to compel the Central Bank to reduce the minimum amount that one can invest in either treasury bonds or a treasury bills.

The Bill has already gone through the first reading in parliament.

However, the Bill is ambiguous on the proposed minimum amount.

MPs are expected to correct this ambiguity during debate by probably setting the figure.

In addition, two months ago various entities took issue with section 45 of the Central Bank of Kenya Bill 2014 which seeks to repeal the Central Bank of Kenya Act Cap 491.

Section 45 of the new CBK Bill 2014 empowers the governor to take all actions required for the administration of the bank, including entering into contractual commitments on behalf of the bank; this according to those opposed to this section would be prone to abuse of power.

The Central Bank of Kenya Amendment Bill 2014 also seeks to correct this as well as compel the central bank to put in place mechanisms to establish electronic transactions in the issuance of public debt instruments. The Bill states in part;

45. The bank in its capacity as fiscal agent and banker to any public entity may, subject to the instructions of that public entity have power to;

a) be the official depository of the public entity concerned and accept deposits and effect payments for the account of that public entity…

b) maintain and operate special official accounts in accordance with arrangements made between the bank and the public entity concerned

d) pay, remit, collect or accept for deposit or custody funds in Kenya or abroad

e) purchase, sell transfer or accept for custody cheques, bills of exchange and securities

g) purchase, sell, transfer or accept for custody gold or foreign exchange

Kabando notes that the enactment of the bill shall not occasion additional expenditure of public funds.