Uhuru gives teeth to depositor’s fund

By James Anyanzwa

Finance Minister Uhuru Kenyatta has proposed an amendment to the Banking Act to give powers to the Central Bank’s Deposit Protection Fund Board(DPFB) to hold and sell unrealised securities after winding up an institution.

In his 2010/11 budget speech, the minister said the move would allow the DPFB finalise the liquidation process within a reasonable period of time.

Difficult to finalise

He noted that while the board is currently liquidating 20 institutions, most of the securities held by the fund comprise of rural homesteads and irregularly acquired land that are unrealisable, making it difficult for the DBFB to finalise the liquidation process.

The minister also proposed an amendment to the Microfinance Act to facilitate use of thirty party agents by the deposit-taking microfinance institutions.

Last year Mr Kenyatta amended the Banking Act to introduce agency banking in order to increase the outreach of the banking sector to the vast majority of the underbanked and unbanked Kenyan populace.