Kenya's Central Bank tightens rules for banks and credit bureaus
Kenya's government has submitted a new law to the Parliament designed to streamline the banking industry and credit bureaus in the country.Kenya's government has submitted a new law to the Parliament designed to streamline the banking industry and credit bureaus in the country.
If passed, the law would drastically
fines for financial institutions as well as credit bureaus in case of a breach of the rules, reaching up to Sh5 million (€45,000) as opposed to Sh1 million currently, The Star reports.
It would also give the Central Bank powers to prescribe the penalties to those who fail to comply with regulations, a task which is currently under the responsibility of the Ministry of Finance.
Credit bureaus help collect information on borrowers and make this data available to lenders in order to help them make a decision.
They can address the deficit of information between lenders and borrowers so that lenders can make a proper risk assessment.
"The Bill seeks to enhance penalties provided for under the Banking Act in order to deter institutions from violation of the law while pursuing to make high profits and acquire market dominance," states the Finance Bill.