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
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