Musalia Mudavadi wants tough actions in banking sector

NAIROBI, KENYA: Amani Congress leader Musalia Mudavadi has urged the Central Bank of Kenya (CBK) to completely cure the systemic problem commercial banks that threaten to ‘bring down’ the economy.

Mudavadi said there were integrity questions on the Central Bank of Kenya's (CBK) supervision division in and asked the institution to step up its regulatory role to cushion depositors from further anguish.

"We hope the supervision division of CBK has not been part of the compromise to make depositors lose their resources," he said.

Mudavadi said it was sad that the country's banking sector was showing signs of instability, noting that the crisis was a threat to national security.

"Any lack of confidence in the system has disastrous impacts on the stability of a country, once the system collapses, the effects reverberate throughout and lead to collateral collapse of the economy," said Mudavadi.

Last week CBK put chase Bank under receivership after it emerged that insider dealings had led to financial upheavals that left the institution unable to remain afloat.

This is the second time in a few months for a bank to be put under receivership after Imperial Bank also fell.

He said there were indications that CBK was not keen on dialoguing with stakeholders, warning that the stability of the sector should be taken seriously.

"There must be proper dialogue between CBK and financial institutions. There are indications from some quarters that CBK does not dialogue and that needs to be sorted so that a common strategy can be reached," he added.