RUTO seeks MPs’ nod to impose severe penalties on Credit Reference Bureaus and defaulters – See what the new bill says that has scared individuals and institutions

Thursday, November 14, 2024 – President William Ruto’s government is seeking approval from MPs to impose severe penalties on Credit Reference Bureau defaulters.

This follows a proposal submitted to the National Assembly aimed at transforming the borrowing sector by expanding penalty measures within the lending space.

The Business Law (Amendment) Bill 2024 will particularly target stakeholders in the financial sectors cutting across consumers to institutions and Credit Reference Bureaus.

Key among the target institutions include the Credit Reference Bureaus (CRBs), financial institutions, or any other persons who will refuse to comply with financial guidelines issued by the Central Bank of Kenya (CBK).

The bill stipulates hefty fines for Kenyans who will be found to have failed to adhere to the regulations by fining them up to Ksh1 million.

Should the National Assembly pass the bill, CRBs and financial institutions who do not follow directives issued to them by the CBK will be fined Ksh20 million.

This is particularly important as the CBK has been blaming some of the institutions for sharing the private data of the customers contrary to data protection laws.

Alternatively, the institutions will be fined 3 times more of the money that they will have made as a result of not following directives issued by the CBK regarding the financial sector regulations.

Corporate entities that will be found to have failed to follow the provisions of the amendment will be fined Ksh3 million.

According to documents presented before the National Assembly, the new proposals will seek to amend section 55(2) of the Banking Act.

Initially, individuals who violated such agreements were fined Ksh10,000, while institutions and CRBs parted with up to Ksh1 million in penalties.

The Kenyan DAILY POST