Banks in fresh trouble as new Bill proposes ban on deposits of public funds

The only banks allowed to take public money are those in which the Government has atleast a 20 per cent stake directly or indirectly. These are just five: Kenya Commercial Bank, National Bank of Kenya, Consolidated Bank of Kenya, Development Bank of Kenya and the Post Office Savings Bank.PHOTO: COURTESY

MPs are now mulling a fresh law to stop State agencies from depositing public money in commercial banks. It is a move that will cause a major disruption in the banking industry, as key players will be blocked from accessing Government funds.

In a new Bill headed to the Government Printer for publication, the MPs have proposed tough new rules to guide the Government on where State agencies will bank, for how long, and the threshold of interest to warrant banking with commercial banks.