By Dickens Wasonga
Gem MP Jakoyo Midiwo plans to table a bill in Parliament seeking to restrain the government from depositing public coffers in foreign and private banks.
Speaking in Kisumu last week , Midiwo accused the government of doing business with some foreign and private banks a move he claimed was derailing investment.
“The kind of business the government is involved in with some foreign and private banks is a big impediment to investment in this country,” Midiwo said.
He blamed souring interest rates on the involvement between the government and the banks.
If successful, Midiwo said the bill will force the government to bank only with commercial banks where it has interest.
He said they will include the Kenya Commercial Bank, National Bank and the Consolidated Bank.
“The women and youth funds should be channeled through these three banks to avoid the high interest rates currently charged by the private banks,” he said.
Midiwo who is also the ODM chief whip said the bill will give the banks a proper capital base to enable them transact their businesses.
In March, amendments to the Finance Bill 2011/2012 sponsored by Midiwo to have the lending rates capped were defeated in Parliament.
Midiwo accused some MPs of shooting down the amendments.
“This market must be controlled. I will be introducing similar amendments to the Finance Bill 2012/2013,” he said.
Central Bank of Kenya‘s Monetary Policy Committee reduced the Central Bank’s base lending rate to 16.5 per cent down from 18 percent on in July.
The MPC attributed the lowering to improvements in inflation and the local currency exchange rate.
The proposals to have interest rates controlled has been a contentious issue for more than a decade and since the introduction of Finance Bill 2011/2012, parliament had rejected the bill forcing the Finance minister to withdraw it twice.
The failed amendments had proposed to cap interest rates on loans at at most 4 per-cent points more than the then 18 per cent Central Bank Rate, which would have put the cap at 22 per cent and put a base on deposit interests at 12.6 percent.
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