|
|
THE BANKING (LICENCES) (FORMS AND FEES) REGULATIONS
ARRANGEMENT OF REGULATIONS
| 2. |
Applications for licences
|
SCHEDULES
| FIRST SCHEDULE [r. 2] — |
FORMS A AND B
|
| SECOND SCHEDULE [r. 3] — |
FORMS B AND C
|
| THIRD SCHEDULE [r. 4] — |
FORMS E AND F
|
| FOURTH SCHEDULE [r. 5] — |
FEES
|
THE BANKING (LIQUIDATION OF INSTITUTIONS) REGULATIONS, 1992
| 1. |
Citation
These Regulations may be cited as the Banking (Liquidation of Institutions) Regulations, 1992.
|
| 2. |
Notice of appointment and security
| (1) |
Where the Board is appointed as a liquidator of an institution it shall, as soon as practicable thereafter, cause notice of its appointment to be published in the Gazette and at least one daily newspaper of general circulation in Kenya.
|
| (2) |
The Board shall not be required to give any security by reason of its appointment as liquidator and upon appointment shall be deemed to have given security for the purposes of the Companies (Winding-up) Rules (Cap. 486, Sub. Leg.).
|
|
| 3. |
Meeting of creditors
Where the Board has been appointed as liquidator of an institution, it shall not, unless the court otherwise directs, be necessary for the liquidator to convene a meeting of creditors and contributories under the provisions of section 236 of the Companies Act (Cap. 486).
|
| 4. |
Power to waive proof of debt
| (1) |
Where the Board has been appointed as liquidator of an institution, it may, if it deems fit, admit the claim of any depositor or class of depositors without submission of formal proof of debt and shall notify the depositor or depositors concerned accordingly.
|
| (2) |
Any depositor who is dissatisfied with the decision of the Board may apply to the Court in the same manner as a dissatisfied creditor under the provisions of the Companies (Winding-up) Rules.
|
|
| 5. |
Power of High Court to decide all claims
The High Court shall, except as otherwise expressly provided in regulation 6, have exclusive jurisdiction to entertain and decide any claim made by or against an institution which, is being wound-up or any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding-up of an institution.
|
| 6. |
Transfer of pending proceeding
| (1) |
Where an institution is being wound-up, no suit or other legal proceeding, whether civil or criminal, in respect of which the High Court has jurisdiction under the Act or these Regulations and which is pending in any other court immediately before the commencement of the Act or the commencement of the winding-up of the institution, whichever is later, shall be proceeded with except in the manner provided under these Regulations.
|
| (2) |
The liquidator shall, within three months from the commencement of the winding-up or the commencement of the Act, whichever is later, or such further time as the High Court may allow, submit to the High Court a report containing a list of all such pending proceedings together with particulars thereof.
|
| (3) |
On receipt of a report under subregulation (2), the High Court may give the parties concerned an opportunity to show cause why the proceedings should not be transferred to the Court and it shall make such order as it deems fit transferring all or such of the pending proceedings as may be specified in the order to the Court and such proceedings shall thereafter be disposed of by the Court.
|
| (4) |
If any proceeding pending in a Court is not transferred to the High Court under subregulation (3), the proceedings shall be continued in the Court in which the proceedings were pending.
|
| (5) |
Nothing in this section shall apply to any proceeding pending in appeal before the Court of Appeal or the High Court.
|
|
| 7. |
Public examination of officers and others
| (1) |
In the winding-up of an institution, the liquidator shall determine whether, in his opinion, any loss has been caused to the institution since its formation by any act or omission (whether or not a fraud has been committed by such act or omission) of a person in the promotion or formation of the institution or of any officer or auditor of the institution.
|
| (2) |
If the liquidator determines that a loss has been caused by an act or omission referred to in subregulation (1), he may apply to the High Court for an order that any officer or auditor of an institution or any person who has taken part in the promotion or formation of the institution shall be publicly examined and the Court shall hold a public sitting on a date to be appointed for that purpose and direct that such person, director or auditor shall attend thereat and shall be publicly examined as to the promotion or formation or the conduct of the business of the institution or as to his conduct and dealings in so far as they relate to the affairs of the institution.
|
| (3) |
The liquidator shall take part in the examination and for that purpose may employ a legal representative of his own choice.
|
| (4) |
Any creditor or contributor may also take part in the examination either personally or by an advocate.
|
| (5) |
The High Court may put such questions to the person examined as it thinks fit.
|
| (6) |
The person examined shall be examined on oath and shall answer all such questions as the High Court may put or allow to be put to him.
|
| (7) |
A person ordered to be examined under this regulation may, at his own cost, employ an advocate who shall be at liberty to put to him such questions as the High Court may deem just for the purpose of enabling him to explain or qualify any answer given by him:
Provided that if he is, in the opinion of the High Court, exculpated from any charges made against him, the High Court may allow such costs in its discretion as it may deem fit.
|
| (8) |
Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined.
|
| (9) |
References in this regulation to an officer or auditor of an institution shall include a former officer or auditor of that institution.
|
|
| 8. |
Special provisions affecting examinations
| (1) |
This regulation shall apply to any examination under regulation 7 and also to any examination under section 263 or section 265 of the Companies Act (Cap. 486) which is conducted in the course of the winding-up of any institution whether such winding-up commenced before or after the commencement of the Act.
|
| (2) |
No person shall be excused from examination by reason of the fact that any other proceedings, whether criminal or civil, are in progress or contemplated against him.
|
| (3) |
The official record of the evidence taken on any such examination may thereafter be used in evidence against any person examined in any civil proceedings and shall be open to the inspection of any creditor or contributory at all reasonable times.
|
|
| 9. |
Special provisions for assessing damages
| (1) |
Where an application is made to the High Court under section 323 of the Companies Act (Cap. 486) against any person for repayment or restoration of any money or property of an institution and the applicant makes out a prima facie case against such person, the High Court shall make an order against such person to repay and restore the money or property unless he proves that he is not liable to make the repayment or restoration either wholly or in part:
Provided that where such an order is made jointly against two or more persons, they shall be jointly and severally liable to make the repayment or restoration of the money or property.
|
| (2) |
Where an application is made to the High Court under section 323 of the Companies Act (Cap. 486) and the High Court has reason to believe that any property belongs to any promoter, officer, manager or liquidator of the institution, whether the property stands in the name of such person or any other person as an ostensible owner, then the High Court may, at any time, whether before or after making an order under subregulation (1) direct the attachment of such property, or such portion thereof, as it thinks fit and the property so attached shall remain subject to attachment unless the ostensible owner can prove to the satisfaction of the High Court that he is the real owner and the provisions of the Civil Procedure Act relating to attachment of property shall, as far as may be, apply to such attachment.
|
|
| 10. |
Resignation of Board
The Board may, at any time, resign as liquidator of an institution upon giving written notice to the Official Receiver whereupon the Official Receiver shall become the liquidator of the institution unless and until another liquidator is appointed by the Court in accordance with the provisions of the Companies Act (Cap. 486).
|
THE BANKING (LICENCES) (FORMS AND FEES) REGULATIONS, 1969
| 1. |
Citation
These Regulations may be cited as the Banking (Licences) (Forms and Fees) Regulations, 1969.
|
| 2. |
Applications for licences
An application for the grant of a licence by a bank or financial institution shall be submitted in duplicate in the appropriate form set out in the First Schedule and shall be accompanied by such statements as the bank or financial institution considers necessary in support of its application.
|
| 3. |
Form of licence
A licence granted to a bank or financial institution shall be in the appropriate form set out in the Second Schedule.
|
| 4. |
Fees for licences
The licence fee shall be sent to the Central Bank of Kenya accompanied by a licence fee payment voucher in duplicate in the appropriate form set out in the Third Schedule.
[L.N. 57/2011, r. 2.]
|
| 5. |
Other fees
The fees specified in the Fourth Schedule shall be payable for the various matters set out therein.
|
FIRST SCHEDULE [r. 2]
FORMS A AND B
FORM A
|
APPLICATION FOR A LICENCE TO CONDUCT BANKING BUSINESS
|
.............................. (name of bank) of ............................. (address) hereby applies for a licence to carry on a banking business.
| 1. |
Country of incoporation ...................................
|
| 2. |
Situation of registered office ..................................
|
| 3. |
Situation of principal office in Kenya ..................................
|
| 4. |
List of places of business in Kenya-
..........................................................
..........................................................
..........................................................
|
| 5. |
| (a) |
nominal value ....................................
|
| (b) |
paid-up value ......................................
|
|
| 6. |
The number of years that the bank has been established and has conducted or carried on banking business—
| (a) |
in country of incorporation .........................................................................
|
| (b) |
in Kenya ............................................................................
|
| (c) |
in other countries ..................................................................
.....................................................................................
.....................................................................................
|
|
| 7. |
Names and addresses of directors
................................................................
|
| 8. |
Name and address of General Manager or Superintendent for Kenya
....................................................................
Date ...........................................
|
............................................................................(Signature of a director of the bank or the
general manager or superintendent for Kenya)
|
Note.—This application must be accompanied by balance sheets and profit and loss accounts for each of the five years preceding the date of this application.
|
FORM B
|
APPLICATION FOR A LICENCE TO CONDUCT BUSINESS OF A FINANCIAL INSTITUTION
|
............................................ (name of financial institution) of ...................................................... (address) hereby applies for a licence to carry on a business of a financial institution.
| 1. |
Country of incorporation .........................................
|
| 2. |
Situation of registered office ................................................
|
| 3. |
Situation of principal office in Kenya ...............................................
|
| 4. |
List of places of business in Kenya—
.................................................................
.................................................................
.................................................................
|
| 5. |
| (a) |
nominal value .........................................
|
| (b) |
paid-up value .......................................
|
|
| 6. |
The number of years that the financial institution has been established and has conducted or carried on business of a financial institution—
| (a) |
in country of incorporation ........................................................
|
| (b) |
in Kenya ............................................................
|
| (c) |
in other countries .......................................
|
|
| 7. |
Names and addresses of directors
.................................................................
.................................................................
.................................................................
|
| 8. |
Name and address of General Manager or Superintendent for Kenya
...................................................................
Date .........................................
|
............................................................................(Signature of a director of the bank or the
general manager or superintendent for Kenya)
|
Note.—This application must be accompanied by balance sheets and profit and loss accounts for each of the five years preceding the date of this application.
|
SECOND SCHEDULE [r. 3]
FORMS B AND C
[L.N. 57/2011, r. 3]
|
FORM C
|
|
|
LICENCE TO CONDUCT A BANKING BUSINESS
|
|
THIS LICENCE is granted to— ..................................... (name of bank) of .................................. (address) and authorizes the said bank to conduct or carry on banking business in Kenya.
This licence is issued subject to the provisions of the Banking Act and to the conditions endorsed hereon.
Dated this ..................... day of ............................
LICENCE NO. .......................................
|
.......................................Central Bank of Kenya
|
FORM D
|
LICENCE TO CONDUCT THE BUSINESS OF A FINANCIAL INSTITUTION
|
[L.N. 57/2011, s. 3.]
THIS LICENCE is granted to— ..................................... (name of financial institution) of ............................................. (address) and authorizes the said financial institution to conduct or carry on business of a financial institution in Kenya.
This licence is issued subject to the provisions of the Banking Act and to the conditions endorsed hereon.
Dated this ..................... day of ............................
LICENCE NO. .......................................
|
.........................................Central Bank of Kenya
|
THIRD SCHEDULE [r. 4]
FORMS E AND F
FORM E
[L.N. 57/2011, r. 4.]
|
LICENCE FEE PAYMENT VOUCHER (BANK)
|
............................................................ (name of bank) of ........................................ (address) hereby encloses the fee of ..................................... for
*the grant of a licence
____________
the annual renewal of
Licence No.
|
Dated ..............................
|
........................................(Signed)
|
|
FOR OFFICIAL USE
|
|
Receipt
|
Received the fee of ......................... in respect of Licence No. ................. for the twelve month period ............................ until .............................
Dated ....................................
|
|
|
..........................................Central Bank of Kenya
|
Note.—This form must be forwarded to the Central Bank of Kenya in duplicate.
* Delete whichever is inapplicable.
FORM F
[L.N. 57/2011, r. 4.]
|
LICENCE FEE PAYMENT VOUCHER (FINANCIAL INSTITUTION)
|
.......................................... (name of financial institution) of ............................. (address) hereby encloses the fee of ........................ for
*he grant of a licence
____________
the annual renewal of
Licence No.
|
Dated ..............................
|
|
|
|
//..................................(Signed)//
|
|
For Official Use
|
|
Receipt
|
Received the fee of ............................... in respect of Licence No. ..................... for the twelve month period ......................... until ...............................
Dated ....................................
|
|
|
.........................................Central Bank of Kenya
|
Note.—This form must be forwarded to the Central Bank of Kenya in duplicate.
* Delete whichever is inapplicable.
FOURTH SCHEDULE [r. 5]
FEES
|
Matter for which fee payable
|
Sh.
|
cts.
|
|
For inspecting statements or other documents ...............
|
10
|
00
|
|
For copies or extracts from statements or other documents,other than licences—
|
|
(i) if certified, per folio of 100 words or part thereof .................
|
10
|
00
|
|
(ii) if not certified, per folio of 100 words or part thereof ............
|
5
|
00
|
|
For copies of licences—
|
|
|
|
(i) if certified .......................
|
10
|
00
|
|
(ii) if not certified .........................
|
5
|
00
|
THE BANKING (LICENCES) (FORMS AND FEES) REGULATIONS
| 1. |
Citation
These Regulations may be cited as the Banking (Licences) (Forms and Fees) Regulations..
|
| 2. |
Applications for licences
An application for the grant of a licence by a bank or financial institution shall be submitted in duplicate in the appropriate form set out in the First Schedule and shall be accompanied by such statements as the bank or financial institution considers necessary in support of its application.
|
| 3. |
Form of licence
A licence granted to a bank or financial institution shall be in the appropriate form set out in the Second Schedule.
|
| 4. |
Fees for licences
The licence fee shall be sent to the Central Bank of Kenya accompanied by a licence fee payment voucher in duplicate in the appropriate form set out in the Third Schedule.
[L.N. 57/2011, r. 2.]
|
| 5. |
Other fees
The fees specified in the Fourth Schedule shall be payable for the various matters set out therein.
|
FIRST SCHEDULE [r. 2]
FORMS A AND B
FORM A
|
APPLICATION FOR A LICENCE TO CONDUCT BANKING BUSINESS
|
.............................. (name of bank) of ............................. (address) hereby applies for a licence to carry on a banking business.
| 1. |
Country of incoporation .....................................................
|
| 2. |
Situation of registered office ..................................................
|
| 3. |
Situation of principal office in Kenya ..................................
|
| 4. |
List of places of business in Kenya-
...........................................................................................
............................................................................................
|
| 5. |
| (a) |
nominal value ....................................................
|
| (b) |
paid-up value ......................................................
|
|
| 6. |
The number of years that the bank has been established and has conducted or carried on banking business—
| (a) |
in country of incorporation ............................................................
|
| (b) |
in Kenya ...............................................................................
|
| (c) |
in other countries ..................................................................
..................................................................................................
|
|
| 7. |
Names and addresses of directors
................................................................................
|
| 8. |
Name and address of General Manager or Superintendent for Kenya
..............................................................................
Date ...........................................
|
..................................................................(Signature of a director of the bank or thegeneral manager or superintendent for Kenya)
|
Note.—This application must be accompanied by balance sheets and profit and loss accounts for each of the five years preceding the date of this application.
|
_____________________________________
FORM B
|
APPLICATION FOR A LICENCE TO CONDUCT BUSINESS OF A FINANCIAL INSTITUTION
|
................................ (name of financial institution) of .............................................. (address) hereby applies for a licence to carry on a business of a financial institution.
| 1. |
Country of incorporation .....................................................................
|
| 2. |
Situation of registered office ................................................................
|
| 3. |
Situation of principal office in Kenya ...............................................
|
| 4. |
List of places of business in Kenya—
.............................................................................................................
.............................................................................................................
|
| 5. |
| (a) |
nominal value .........................................................
|
| (b) |
paid-up value ...........................................................
|
|
| 6. |
The number of years that the financial institution has been established and has conducted or carried on business of a financial institution—
| (a) |
in country of incorporation ........................................................
|
| (b) |
in Kenya ............................................................
|
| (c) |
in other countries .....................................................
|
|
| 7. |
Names and addresses of directors
.......................................................................................................
.......................................................................................................
|
| 8. |
Name and address of General Manager or Superintendent for Kenya
...................................................................................................
...................................................................................................
Date .........................................
|
|
|
....................................................................(Signature of a director of the bank or thegeneral manager or superintendent for Kenya)
|
|
|
Note.—This application must be accompanied by balance sheets and profit and loss accounts for each of the five years preceding the date of this application.
|
SECOND SCHEDULE [r. 3]
FORMS B AND C
[L.N. 57/2011, r. 3]
|
FORM C
|
|
|
LICENCE TO CONDUCT A BANKING BUSINESS
|
|
THIS LICENCE is granted to— ..................................... (name of bank) of .................................. (address) and authorizes the said bank to conduct or carry on banking business in Kenya.
This licence is issued subject to the provisions of the Banking Act and to the conditions endorsed hereon.
Dated this ..................... day of ............................
LICENCE NO. .......................................
|
|
|
|
|
|
|
.........................................Central Bank of Kenya
|
__________________________
FORM D
|
LICENCE TO CONDUCT THE BUSINESS OF A FINANCIAL INSTITUTION
|
[L.N. 57/2011, s. 3.]
THIS LICENCE is granted to— ..................................... (name of financial institution) of ............................................. (address) and authorizes the said financial institution to conduct or carry on business of a financial institution in Kenya.
This licence is issued subject to the provisions of the Banking Act and to the conditions endorsed hereon.
Dated this ..................... day of ............................
LICENCE NO. .......................................
|
|
|
.........................................Central Bank of Kenya
|
THIRD SCHEDULE [r. 4]
FORMS E AND F
FORM E
[L.N. 57/2011, r. 4.]
|
LICENCE FEE PAYMENT VOUCHER (BANK)
|
............................................................ (name of bank) of ........................................ (address) hereby encloses the fee of ..................................... for
*the grant of a licence
____________
the annual renewal of
Licence No.
|
|
|
|
Dated ..........................................
|
.................................................(Signed)
|
|
FOR OFFICIAL USE
|
|
Receipt
|
Received the fee of ......................... in respect of Licence No. ................. for the twelve month period ............................ until .............................
Dated ....................................
|
|
|
.........................................Central Bank of Kenya
|
Note.—This form must be forwarded to the Central Bank of Kenya in duplicate.
* Delete whichever is inapplicable.
__________________________
[L.N. 57/2011, r. 4.]
|
LICENCE FEE PAYMENT VOUCHER (FINANCIAL INSTITUTION)
|
.......................................... (name of financial institution) of ............................. (address) hereby encloses the fee of ........................ for
*the grant of a licence
__________________
the annual renewal of
Licence No.
|
Dated ..............................
|
..................................(Signed)
|
|
|
|
For Official Use
|
|
Receipt
|
Received the fee of ............................... in respect of Licence No. ..................... for the twelve month period ......................... until ...............................
Dated ....................................
|
|
|
.........................................Central Bank of Kenya
|
Note.—This form must be forwarded to the Central Bank of Kenya in duplicate.
* Delete whichever is inapplicable.
FOURTH SCHEDULE [r. 5]
FEES
|
Matter for which fee payable
|
Sh.
|
cts.
|
|
For inspecting statements or other documents ...............
|
10
|
00
|
|
For copies or extracts from statements or other documents,other than licences—
|
|
(i)
|
if certified, per folio of 100 words or part thereof .................
|
10
|
00
|
|
(ii)
|
if not certified, per folio of 100 words or part thereof ............
|
5
|
00
|
|
For copies of licences—
|
|
|
|
(i)
|
if certified .......................
|
10
|
00
|
|
(ii)
|
if not certified .........................
|
5
|
00
|
THE BANKING (LIQUIDATION OF INSTITUTIONS) REGULATIONS
ARRANGEMENT OF REGULATIONS
| 2. |
Notice of appointment and security
|
| 4. |
Power to waive proof of debt
|
| 5. |
Power of High Court to decide all claims
|
| 6. |
Transfer of pending proceeding
|
| 7. |
Public examination of officers and others
|
| 8. |
Special provisions affecting examinations
|
| 9. |
Special provisions for assessing damages
|
THE BANKING (FEES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Fees) (Amendment) Regulations, 1994, and shall come into operation on the 17th June, 1994.
|
| 2. |
The fees specified in the Schedule shall be payable prior to the granting of a licence to an institution to carry on business under the Act.
|
| 3. |
The Banking (Fees) Regulations, 1991 (LN. 240/1991) are revoked.
|
SCHEDULE [r. 2]
|
FEES
|
K.Sh.
|
|
1. (a) On the granting of a licence to an institution and each anniversary thereof ...............
|
400,000
|
|
(b) Additionally, in respect of each branch of an institution within a municipality ............
|
150,000
|
|
(c) Additionally, in respect of each branch of an institution within a town council area ........
|
100,000
|
|
(d) Additionally in respect of an urban council area .......................
|
30,000
|
|
2. On application for a licence to conduct business or open a branch of an institution .......
|
5,000
|
|
3. (a) On application for an authority to establish a representative office .......................
|
5,000
|
|
(b) On granting of an authority to a representative office and each anniversary thereof..............
|
20,000
|
THE BANKING (LIQUIDATION OF INSTITUTIONS) REGULATIONS, 1992
| 1. |
Citation
These Regulations may be cited as the Banking (Liquidation of Institutions) Regulations, 1992.
|
| 2. |
Notice of appointment and security
| (1) |
Where the Board is appointed as a liquidator of an institution it shall, as soon as practicable thereafter, cause notice of its appointment to be published in the Gazette and at least one daily newspaper of general circulation in Kenya.
|
| (2) |
The Board shall not be required to give any security by reason of its appointment as liquidator and upon appointment shall be deemed to have given security for the purposes of the Companies (Winding-up) Rules (Cap. 486, Sub. Leg.).
|
|
| 3. |
Meeting of creditors
Where the Board has been appointed as liquidator of an institution, it shall not, unless the court otherwise directs, be necessary for the liquidator to convene a meeting of creditors and contributories under the provisions of section 236 of the Companies Act (Cap. 486).
|
| 4. |
Power to waive proof of debt
| (1) |
Where the Board has been appointed as liquidator of an institution, it may, if it deems fit, admit the claim of any depositor or class of depositors without submission of formal proof of debt and shall notify the depositor or depositors concerned accordingly.
|
| (2) |
Any depositor who is dissatisfied with the decision of the Board may apply to the Court in the same manner as a dissatisfied creditor under the provisions of the Companies (Winding-up) Rules.
|
|
| 5. |
Power of High Court to decide all claims
The High Court shall, except as otherwise expressly provided in regulation 6, have exclusive jurisdiction to entertain and decide any claim made by or against an institution which, is being wound-up or any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding-up of an institution.
|
| 6. |
Transfer of pending proceeding
| (1) |
Where an institution is being wound-up, no suit or other legal proceeding, whether civil or criminal, in respect of which the High Court has jurisdiction under the Act or these Regulations and which is pending in any other court immediately before the commencement of the Act or the commencement of the winding-up of the institution, whichever is later, shall be proceeded with except in the manner provided under these Regulations.
|
| (2) |
The liquidator shall, within three months from the commencement of the winding-up or the commencement of the Act, whichever is later, or such further time as the High Court may allow, submit to the High Court a report containing a list of all such pending proceedings together with particulars thereof.
|
| (3) |
On receipt of a report under subregulation (2), the High Court may give the parties concerned an opportunity to show cause why the proceedings should not be transferred to the Court and it shall make such order as it deems fit transferring all or such of the pending proceedings as may be specified in the order to the Court and such proceedings shall thereafter be disposed of by the Court.
|
| (4) |
If any proceeding pending in a Court is not transferred to the High Court under subregulation (3), the proceedings shall be continued in the Court in which the proceedings were pending.
|
| (5) |
Nothing in this section shall apply to any proceeding pending in appeal before the Court of Appeal or the High Court.
|
|
| 7. |
Public examination of officers and others
| (1) |
In the winding-up of an institution, the liquidator shall determine whether, in his opinion, any loss has been caused to the institution since its formation by any act or omission (whether or not a fraud has been committed by such act or omission) of a person in the promotion or formation of the institution or of any officer or auditor of the institution.
|
| (2) |
If the liquidator determines that a loss has been caused by an act or omission referred to in subregulation (1), he may apply to the High Court for an order that any officer or auditor of an institution or any person who has taken part in the promotion or formation of the institution shall be publicly examined and the Court shall hold a public sitting on a date to be appointed for that purpose and direct that such person, director or auditor shall attend thereat and shall be publicly examined as to the promotion or formation or the conduct of the business of the institution or as to his conduct and dealings in so far as they relate to the affairs of the institution.
|
| (3) |
The liquidator shall take part in the examination and for that purpose may employ a legal representative of his own choice.
|
| (4) |
Any creditor or contributor may also take part in the examination either personally or by an advocate.
|
| (5) |
The High Court may put such questions to the person examined as it thinks fit.
|
| (6) |
The person examined shall be examined on oath and shall answer all such questions as the High Court may put or allow to be put to him.
|
| (7) |
A person ordered to be examined under this regulation may, at his own cost, employ an advocate who shall be at liberty to put to him such questions as the High Court may deem just for the purpose of enabling him to explain or qualify any answer given by him:
Provided that if he is, in the opinion of the High Court, exculpated from any charges made against him, the High Court may allow such costs in its discretion as it may deem fit.
|
| (8) |
Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined.
|
| (9) |
References in this regulation to an officer or auditor of an institution shall include a former officer or auditor of that institution.
|
|
| 8. |
Special provisions affecting examinations
| (1) |
This regulation shall apply to any examination under regulation 7 and also to any examination under section 263 or section 265 of the Companies Act (Cap. 486) which is conducted in the course of the winding-up of any institution whether such winding-up commenced before or after the commencement of the Act.
|
| (2) |
No person shall be excused from examination by reason of the fact that any other proceedings, whether criminal or civil, are in progress or contemplated against him.
|
| (3) |
The official record of the evidence taken on any such examination may thereafter be used in evidence against any person examined in any civil proceedings and shall be open to the inspection of any creditor or contributory at all reasonable times.
|
|
| 9. |
Special provisions for assessing damages
| (1) |
Where an application is made to the High Court under section 323 of the Companies Act (Cap. 486) against any person for repayment or restoration of any money or property of an institution and the applicant makes out a prima facie case against such person, the High Court shall make an order against such person to repay and restore the money or property unless he proves that he is not liable to make the repayment or restoration either wholly or in part:
Provided that where such an order is made jointly against two or more persons, they shall be jointly and severally liable to make the repayment or restoration of the money or property.
|
| (2) |
Where an application is made to the High Court under section 323 of the Companies Act (Cap. 486) and the High Court has reason to believe that any property belongs to any promoter, officer, manager or liquidator of the institution, whether the property stands in the name of such person or any other person as an ostensible owner, then the High Court may, at any time, whether before or after making an order under subregulation (1) direct the attachment of such property, or such portion thereof, as it thinks fit and the property so attached shall remain subject to attachment unless the ostensible owner can prove to the satisfaction of the High Court that he is the real owner and the provisions of the Civil Procedure Act relating to attachment of property shall, as far as may be, apply to such attachment.
|
|
| 10. |
Resignation of Board
The Board may, at any time, resign as liquidator of an institution upon giving written notice to the Official Receiver whereupon the Official Receiver shall become the liquidator of the institution unless and until another liquidator is appointed by the Court in accordance with the provisions of the Companies Act (Cap. 486).
|
THE BANKING (LIQUIDATION OF INSTITUTIONS) REGULATIONS
| 1. |
Citation
These Regulations may be cited as the Banking (Liquidation of Institutions) Regulations.
|
| 2. |
Notice of appointment and security
| (1) |
Where the Board is appointed as a liquidator of an institution it shall, as soon as practicable thereafter, cause notice of its appointment to be published in the Gazette and at least one daily newspaper of general circulation in Kenya.
|
| (2) |
The Board shall not be required to give any security by reason of its appointment as liquidator and upon appointment shall be deemed to have given security for the purposes of the Companies (Winding-up) Rules (Cap. 486, Sub. Leg.).
|
|
| 3. |
Meeting of creditors
Where the Board has been appointed as liquidator of an institution, it shall not, unless the court otherwise directs, be necessary for the liquidator to convene a meeting of creditors and contributories under the provisions of section 236 of the Companies Act (Cap. 486).
|
| 4. |
Power to waive proof of debt
| (1) |
Where the Board has been appointed as liquidator of an institution, it may, if it deems fit, admit the claim of any depositor or class of depositors without submission of formal proof of debt and shall notify the depositor or depositors concerned accordingly.
|
| (2) |
Any depositor who is dissatisfied with the decision of the Board may apply to the Court in the same manner as a dissatisfied creditor under the provisions of the Companies (Winding-up) Rules (Winding-up) Rules (Cap. 486, Sub. Leg.).
|
|
| 5. |
Power of High Court to decide all claims
The High Court shall, except as otherwise expressly provided in regulation 6, have exclusive jurisdiction to entertain and decide any claim made by or against an institution which, is being wound-up or any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding-up of an institution.
|
| 6. |
Transfer of pending proceeding
| (1) |
Where an institution is being wound-up, no suit or other legal proceeding, whether civil or criminal, in respect of which the High Court has jurisdiction under the Act or these Regulations and which is pending in any other court immediately before the commencement of the Act or the commencement of the winding-up of the institution, whichever is later, shall be proceeded with except in the manner provided under these Regulations.
|
| (2) |
The liquidator shall, within three months from the commencement of the winding-up or the commencement of the Act, whichever is later, or such further time as the High Court may allow, submit to the High Court a report containing a list of all such pending proceedings together with particulars thereof.
|
| (3) |
On receipt of a report under subregulation (2), the High Court may give the parties concerned an opportunity to show cause why the proceedings should not be transferred to the Court and it shall make such order as it deems fit transferring all or such of the pending proceedings as may be specified in the order to the Court and such proceedings shall thereafter be disposed of by the Court.
|
| (4) |
If any proceeding pending in a Court is not transferred to the High Court under subregulation (3), the proceedings shall be continued in the Court in which the proceedings were pending.
|
| (5) |
Nothing in this section shall apply to any proceeding pending in appeal before the Court of Appeal or the High Court.
|
|
| 7. |
Public examination of officers and others
| (1) |
In the winding-up of an institution, the liquidator shall determine whether, in his opinion, any loss has been caused to the institution since its formation by any act or omission (whether or not a fraud has been committed by such act or omission) of a person in the promotion or formation of the institution or of any officer or auditor of the institution.
|
| (2) |
If the liquidator determines that a loss has been caused by an act or omission referred to in subregulation (1), he may apply to the High Court for an order that any officer or auditor of an institution or any person who has taken part in the promotion or formation of the institution shall be publicly examined and the Court shall hold a public sitting on a date to be appointed for that purpose and direct that such person, director or auditor shall attend thereat and shall be publicly examined as to the promotion or formation or the conduct of the business of the institution or as to his conduct and dealings in so far as they relate to the affairs of the institution.
|
| (3) |
The liquidator shall take part in the examination and for that purpose may employ a legal representative of his own choice.
|
| (4) |
Any creditor or contributor may also take part in the examination either personally or by an advocate.
|
| (5) |
The High Court may put such questions to the person examined as it thinks fit.
|
| (6) |
The person examined shall be examined on oath and shall answer all such questions as the High Court may put or allow to be put to him.
|
| (7) |
A person ordered to be examined under this regulation may, at his own cost, employ an advocate who shall be at liberty to put to him such questions as the High Court may deem just for the purpose of enabling him to explain or qualify any answer given by him:
Provided that if he is, in the opinion of the High Court, exculpated from any charges made against him, the High Court may allow such costs in its discretion as it may deem fit.
|
| (8) |
Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined.
|
| (9) |
References in this regulation to an officer or auditor of an institution shall include a former officer or auditor of that institution.
|
|
| 8. |
Special provisions affecting examinations
| (1) |
This regulation shall apply to any examination under regulation 7 and also to any examination under section 263 or section 265 of the Companies Act (Cap. 486) which is conducted in the course of the winding-up of any institution whether such winding-up commenced before or after the commencement of the Act.
|
| (2) |
No person shall be excused from examination by reason of the fact that any other proceedings, whether criminal or civil, are in progress or contemplated against him.
|
| (3) |
The official record of the evidence taken on any such examination may thereafter be used in evidence against any person examined in any civil proceedings and shall be open to the inspection of any creditor or contributory at all reasonable times.
|
|
| 9. |
Special provisions for assessing damages
| (1) |
Where an application is made to the High Court under section 323 of the Companies Act (Cap. 486) against any person for repayment or restoration of any money or property of an institution and the applicant makes out a prima facie case against such person, the High Court shall make an order against such person to repay and restore the money or property unless he proves that he is not liable to make the repayment or restoration either wholly or in part:
Provided that where such an order is made jointly against two or more persons, they shall be jointly and severally liable to make the repayment or restoration of the money or property.
|
| (2) |
Where an application is made to the High Court under section 323 of the Companies Act (Cap. 486) and the High Court has reason to believe that any property belongs to any promoter, officer, manager or liquidator of the institution, whether the property stands in the name of such person or any other person as an ostensible owner, then the High Court may, at any time, whether before or after making an order under subregulation (1) direct the attachment of such property, or such portion thereof, as it thinks fit and the property so attached shall remain subject to attachment unless the ostensible owner can prove to the satisfaction of the High Court that he is the real owner and the provisions of the Civil Procedure Act (Cap. 21) relating to attachment of property shall, as far as may be, apply to such attachment.
|
|
| 10. |
Resignation of Board
The Board may, at any time, resign as liquidator of an institution upon giving written notice to the Official Receiver whereupon the Official Receiver shall become the liquidator of the institution unless and until another liquidator is appointed by the Court in accordance with the provisions of the Companies Act (Cap. 486).
|
THE BANKING (PENALTIES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Penalties) Regulations, 1999 and shall apply to all banks and other institutions licensed under the Act to conduct business in Kenya.
|
| 2. |
| (a) |
Any institution or other person who fails or refuses to comply with any directions given by the Central Bank under the Act shall be liable to a penalty not exceeding one million shillings in the case of an institution, or one hundred thousand shillings in the case of a natural person.
|
| (b) |
The Minister may prescribe additional penalties not exceeding ten thousand shillings in each case for each day or part thereof during which such failure or refusal continues.
|
|
| 3. |
(1) The following shall constitute specific violations by an institution of the directions given by the Central Bank which shall be subject to assessment of monetary penalties under these Regulations—
| (a) |
loans, advances or other credit facilities granted by the institution to any person in excess of the institution’s core capital;
|
| (b) |
outstanding unsecured advances to any of the institution’s employees or their associates;
|
| (c) |
outstanding advances, loans or credit facilities which are unsecured or not fully secured—
| (i) |
to any of its officers or their associates; or |
| (ii) |
to any person of whom or of which any of its officers has an interest as an agent, principal, director, manager or shareholder; or |
| (iii) |
to any person of whom or of which any of its officers is a guarantor; |
|
| (d) |
outstanding advance, loan or credit facility to any of its directors or other person participating in the general management of the institution which—
| (i) |
has not been approved by the full board of directors of the institution upon being satisfied that it is viable; |
| (ii) |
has not been made in the normal course of business and on terms similar to those offered to ordinary customers of the institution; and |
| (iii) |
has not been reported to the Central Bank within seven days thereof as being approved under (i) above; |
|
| (e) |
an aggregate of credit facilities to any one of the institution’s shareholders, directors, officers or employees which is in excess of twenty per cent of the institution’s core capital;
|
| (f) |
the aggregate of loans, advances and other credit facilities to share holders, directors, officers and employees is in excess of one hundred per cent of the institution’s core capital;
|
| (g) |
failure of the institution to—
| (i) |
exhibit its annual audited accounts, throughout each year, in a conspicuous place in every office and branch in Kenya; or |
| (ii) |
publish its annual audited accounts in a national newspaper within the number of months of the end of each financial year as prescribed under the minimum disclosure requirements prescribed from time to time by the Central Bank; |
|
| (h) |
failure of the institution to submit, not later than three months after the end of its financial year, to the Central Bank its annual audited accounts and a copy of the auditor’s report in the prescribed form;
|
| (i) |
failure of the institution to furnish, at such time and in such manner as the Central Bank may direct, such information in accurate and complete manner as the Central Bank may require to properly discharge its functions under the Act.
|
|
| (2) |
Monetary penalties on non-compliance with other directions not covered herein above may be levied by the Central Bank.
|
| 4. |
| (a) |
The Central Bank, after reviewing all available information and examining the existence of the contravention or violations of one or more of the provisions referred to herein, shall notify the institution in writing advising it of its findings and its decision to assess the penalties.
|
| (b) |
A notification under (a) above shall advise the institution of a reasonable time-frame within which the violation shall be rectified.
|
|
| 5. |
Following the notification and expiration of the time-frame designated in 4 above, or sooner if advised by the institution of the correction of the violation, the Director of Bank Supervision of the Central Bank shall instruct the institution, in writing, as to the amount of monetary penalties assessed and the manner in which such monies shall be paid to the Central Bank.
|
| 6. |
| (a) |
Where the Central Bank is not satisfied, either by evidence provided by the institution or information obtained by the Central Bank, that the violation has been rectified as directed, the daily monetary penalty prescribed in regulation 2(b) shall continue to accrue.
|
| (b) |
Once the Central Bank is fully satisfied that the violation has been rectified, the daily penalty shall cease to accrue and the institution shall be assessed the aggregate penalty.
|
|
THE BANKING (PENALTIES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Penalties) Regulations, 1999 and shall apply to all banks and other institutions licensed under the Act to conduct business in Kenya.
|
| 2. |
| (a) |
Any institution or other person who fails or refuses to comply with any directions given by the Central Bank under the Act shall be liable to a penalty not exceeding one million shillings in the case of an institution, or one hundred thousand shillings in the case of a natural person.
|
| (b) |
The Minister may prescribe additional penalties not exceeding ten thousand shillings in each case for each day or part thereof during which such failure or refusal continues.
|
|
| 3. |
(1) The following shall constitute specific violations by an institution of the directions given by the Central Bank which shall be subject to assessment of monetary penalties under these Regulations—
| (a) |
loans, advances or other credit facilities granted by the institution to any person in excess of 25% of the institution’s core capital;
|
| (b) |
outstanding unsecured advances to any of the institution’s employees or their associates;
|
| (c) |
outstanding advances, loans or credit facilities which are unsecured or not fully secured—
| (i) |
to any of its officers or their associates; or |
| (ii) |
to any person of whom or of which any of its officers has an interest as an agent, principal, director, manager or shareholder; or |
| (iii) |
to any person of whom or of which any of its officers is a guarantor; |
|
| (d) |
outstanding advance, loan or credit facility to any of its directors or other person participating in the general management of the institution which—
| (i) |
has not been approved by the full board of directors of the institution upon being satisfied that it is viable; |
| (ii) |
has not been made in the normal course of business and on terms similar to those offered to ordinary customers of the institution; and |
| (iii) |
has not been reported to the Central Bank within seven days thereof as being approved under (i) above; |
|
| (e) |
an aggregate of credit facilities to any one of the institution’s shareholders, directors, officers or employees which is in excess of twenty per cent of the institution’s core capital;
|
| (f) |
the aggregate of loans, advances and other credit facilities to share holders, directors, officers and employees is in excess of one hundred per cent of the institution’s core capital;
|
| (g) |
failure of the institution to—
| (i) |
exhibit its annual audited accounts, throughout each year, in a conspicuous place in every office and branch in Kenya; or |
| (ii) |
publish its annual audited accounts in a national newspaper within the number of months of the end of each financial year as prescribed under the minimum disclosure requirements prescribed from time to time by the Central Bank; |
|
| (h) |
failure of the institution to submit, not later than three months after the end of its financial year, to the Central Bank its annual audited accounts and a copy of the auditor’s report in the prescribed form;
|
| (i) |
failure of the institution to furnish, at such time and in such manner as the Central Bank may direct, such information in accurate and complete manner as the Central Bank may require to properly discharge its functions under the Act.
|
|
| (2) |
Monetary penalties on non-compliance with other directions not covered herein above may be levied by the Central Bank.
[L.N. 164/1999, r. 2.]
|
| 4. |
| (a) |
The Central Bank, after reviewing all available information and examining the existence of the contravention or violations of one or more of the provisions referred to herein, shall notify the institution in writing advising it of its findings and its decision to assess the penalties.
|
| (b) |
A notification under (a) above shall advise the institution of a reasonable time-frame within which the violation shall be rectified.
|
|
| 5. |
Following the notification and expiration of the time-frame designated in 4 above, or sooner if advised by the institution of the correction of the violation, the Director of Bank Supervision of the Central Bank shall instruct the institution, in writing, as to the amount of monetary penalties assessed and the manner in which such monies shall be paid to the Central Bank.
|
| 6. |
| (a) |
Where the Central Bank is not satisfied, either by evidence provided by the institution or information obtained by the Central Bank, that the violation has been rectified as directed, the daily monetary penalty prescribed in regulation 2(b) shall continue to accrue.
|
| (b) |
Once the Central Bank is fully satisfied that the violation has been rectified, the daily penalty shall cease to accrue and the institution shall be assessed the aggregate penalty.
|
|
THE BANKING (FEES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Fees) (Amendment) Regulations, 1994, and shall come into operation on the 17th June, 1994.
|
| 2. |
The fees specified in the Schedule shall be payable prior to the granting of a licence to an institution to carry on business under the Act.
|
| 3. |
The Banking (Fees) Regulations, 1991 (LN. 240/1991) are revoked.
|
SCHEDULE [r. 2]
|
FEES
|
K.Sh.
|
|
1. (a) On the granting of a licence to an institution and each anniversary thereof ...............
|
400,000
|
|
(b) Additionally, in respect of each branch of an institution within a municipality ............
|
150,000
|
|
(c) Additionally, in respect of each branch of an institution within a town council area ........
|
100,000
|
|
(d) Additionally in respect of an urban council area .......................
|
30,000
|
|
2. On application for a licence to conduct business or open a branch of an institution .......
|
5,000
|
|
3. (a) On application for an authority to establish a representative office .......................
|
5,000
|
|
(b) On granting of an authority to a representative office and each anniversary thereof..............
|
20,000
|
THE BANKING (FEES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Fees) (Amendment) Regulations and shall come into operation on the 17th June, 1994.
|
| 2. |
The fees specified in the Schedule shall be payable prior to the granting of a licence to an institution to carry on business under the Act.
|
| 3. |
The Banking (Fees) Regulations, 1991 (LN. 240/1991) are revoked.
|
SCHEDULE [r. 2]
|
FEES
|
KSh.
|
|
1.
|
(a)
|
On the granting of a licence to an institution and each anniversary thereof .................................................
|
400,000
|
|
|
(b)
|
Additionally, in respect of each branch of an institution within a municipality .........................................
|
150,000
|
|
|
(c)
|
Additionally, in respect of each branch of an institution within a town council area ......................................
|
100,000
|
|
|
(d)
|
Additionally in respect of an urban council area .......................
|
30,000
|
|
2.
|
On application for a licence to conduct business or open a branch of an institution .............................................
|
5,000
|
|
3.
|
(a)
|
On application for an authority to establish a representative office .......................
|
5,000
|
|
|
(b)
|
On granting of an authority to a representative office and each anniversary thereof ....................................................
|
20,000
|
THE BANKING (DEPOSIT PROTECTION FUND) REGULATIONS, 2003
| 1. |
Citation
These Regulations may be cited as the Banking (Deposit Protection Fund) Regulations, 2003.
|
| 2. |
Interpretation
In these Regulations, unless the context otherwise requires—
“Board” means the Deposit Protection Fund Board established under section 36 of the Act;
“contributory institution” means a bank, a mortgage finance company of financial institution which has received a notice to contribute under section 38(2) of the Act;
“Fund” means the Deposit Protection Fund established by section 37 of the Act.
|
| 3. |
Convening of Board meetings
Meetings of the Board shall be convened by the chairman not less than once in every three months, or whenever the business of the Fund so requires.
|
| 4. |
Proceedings of the Board
| (1) |
A quorum for any meeting of the Board shall be the four members and where the chairman is unable to attend any meeting of the Board the other members present may elect one of their number to be the chairman of the meeting.
|
| (2) |
The validity of any proceedings of the Board shall not be affected by any vacancy in the membership of the Board, or by any defect in the appointment of any member which is discovered subsequent to those proceedings.
|
| (3) |
The decision of the Board shall be authenticated by signature of the chairman or any other person authorized by the chairman for that purpose.
|
|
| 5. |
Keeping of account and other records
| (1) |
Subject to the Act and these Regulations, the Board shall—
| (a) |
keep proper accounts and proper records in relation to its accounts; and
|
| (b) |
in every financial year, prepare a statement of accounts showing its state of affairs, income and expenditure.
|
|
| (2) |
The accounts shall include contributions by contributory institutions and investment by the Fund.
|
| (3) |
A statement of accounts prepared in accordance with subregulation (1) shall be audited by auditors appointed by the Board.
|
| (4) |
For the purposes of this regulation, no person shall be appointed as an auditor unless he is qualified under section 161 of the Companies Act (Cap. 486) and is approved by the Central Bank.
|
| (5) |
Members of the Board appointed by the Minister under section 36(4)(c) of the Act shall hold office for a period of four years and shall be eligible for re-appointment.
|
| (6) |
The Board shall publish the report prepared under section 42(1) of the Act within three months of its submission to the Minister.
|
|
| 6. |
Board to determine average deposit liabilities
Subject to the Act, the average of a contributory institution’s total deposit liabilities shall be the amount which the Board determines as representing its average deposit liabilities over a period of twelve months preceding the levying of contributions.
|
| 7. |
Power of Board to waive contributions
The Board may waive a contribution by a contributory institution if it appears to the Board that an institution which is licensed is carrying on substantially the same business as that previously carried on by one or more institutions which are, or were contributory institutions, but nothing in these Regulations shall entitle any institution to a repayment of the contributions previously made to the Fund.
|
| 8. |
Payments out of the Fund
| (1) |
Whenever an contributory institution shall become insolvent in accordance with section 39(6) of the Act and if at that time the institution is a contributory institution whose deposits are protected, the Board shall, as soon as is practicable, pay out of the Fund by cash, cheque or bank transfer to a depositor who has a protected deposit with the institution an amount equal to his protected deposit.
|
| (2) |
In the event of uncertainty of records, the Board may only pay such percentage of the protected deposit as it may deem appropriate in the circumstances.
|
| (3) |
No account whatsoever shall be taken of any liability unless proof of the debt which gives rise to it has been given to the Board in such manner and at such times as the Board shall determine.
|
|
| 9. |
Protected deposit defined
| (1) |
Subject to the Act, and in relation to a contributory institution, any reference to a protected deposit is a reference to the total liability of the institution to the depositor limited to a maximum of one hundred thousand shillings:
Provided that the Minister may, by Order, and with the approval of the Board, increase the sum specified under this regulation to a sum specified in the Order.
|
| (3) |
In determining the liability of a contributory institution to a depositor, no account shall be taken of any liability in respect of a deposit if it is no longer protected or if it was made after termination of the protection of deposits of that institution under section 38(5) of the Act.
|
| (4) |
In all cases before termination of protection of deposit, the Board shall publish a notice in the Gazette and in one national newspaper of its intention to terminate protection of deposits in an institution.
|
| (5) |
Unless the Board otherwise directs, there shall be deducted the amount of any liability of a depositor to the contributory institution in respect of which a right of set-off existed immediately before the institution became insolvent in accordance with section 39 (6) of the Act against any such deposit or in respect of which such a right would then have existed if the deposit in question had been payable on demand and the liability in question had fallen due.
|
|
| 10. |
Liability of insolvent institution to the Board
| (1) |
Subject to the Act and these Regulations, where a contributory institution is insolvent and the Board has made or is under a liability to make an insolvency payment to a depositor, the institution shall become liable to the Board, as in respect of contractual debt incurred immediately before the institution became insolvent, for an amount equal to the Board’s liability.
|
| (2) |
In all cases, no payment shall be made by the insolvent institution to a depositor unless full satisfaction has been given to the Board in respect of all moneys paid by the Board to the depositor.
|
| (3) |
The liability of the insolvent contributory institution to a depositor shall be reduced by an amount equal to insolvency payment made or to be made by the Board to the depositor.
|
|
| 11. |
Liquidator’s duty to the Board
The duty of the liquidator of an insolvent contributory institution shall be to pay to the Board instead of the depositor the amount referred to under regulation 8, and if the amount paid to the Board equals the insolvency payment made to the depositor by the Board, the liquidator shall thereafter pay to the depositor instead of the Board any excess amount.
|
| 12. |
Furnishing of information by a liquidator or an institution
The Board may, by notice in writing served on an contributory institution or the liquidator of an insolvent institution, require him or such institution at such place as may be specified in the notice to furnish to the Board such information and such books, papers or records as the Board may require to carry out its functions under the Act.
|
| 13. |
Inspection of books, etc.
Where as a result of a contributory institution having become insolvent, any books, papers or records have come into the possession of the official receiver or liquidator he shall permit any person duly authorized by the Board to inspect such books, papers or records.
|
| 14. |
Revocation of L.N. 24/2002
The Banking (Deposit Protection Fund) (Amendment) Regulations, 2002 (L.N. 24/2002) are hereby revoked.
|
THE BANKING (PENALTIES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Penalties) Regulations, 1999 and shall apply to all banks and other institutions licensed under the Act to conduct business in Kenya.
|
| 2. |
| (a) |
Any institution or other person who fails or refuses to comply with any directions given by the Central Bank under the Act shall be liable to a penalty not exceeding one million shillings in the case of an institution, or one hundred thousand shillings in the case of a natural person.
|
| (b) |
The Minister may prescribe additional penalties not exceeding ten thousand shillings in each case for each day or part thereof during which such failure or refusal continues.
|
|
| 3. |
(1) The following shall constitute specific violations by an institution of the directions given by the Central Bank which shall be subject to assessment of monetary penalties under these Regulations—
| (a) |
loans, advances or other credit facilities granted by the institution to any person in excess of 25% of the institution’s core capital;
|
| (b) |
outstanding unsecured advances to any of the institution’s employees or their associates;
|
| (c) |
outstanding advances, loans or credit facilities which are unsecured or not fully secured—
| (i) |
to any of its officers or their associates; or |
| (ii) |
to any person of whom or of which any of its officers has an interest as an agent, principal, director, manager or shareholder; or |
| (iii) |
to any person of whom or of which any of its officers is a guarantor; |
|
| (d) |
outstanding advance, loan or credit facility to any of its directors or other person participating in the general management of the institution which—
| (i) |
has not been approved by the full board of directors of the institution upon being satisfied that it is viable; |
| (ii) |
has not been made in the normal course of business and on terms similar to those offered to ordinary customers of the institution; and |
| (iii) |
has not been reported to the Central Bank within seven days thereof as being approved under (i) above; |
|
| (e) |
an aggregate of credit facilities to any one of the institution’s shareholders, directors, officers or employees which is in excess of twenty per cent of the institution’s core capital;
|
| (f) |
the aggregate of loans, advances and other credit facilities to share holders, directors, officers and employees is in excess of one hundred per cent of the institution’s core capital;
|
| (g) |
failure of the institution to—
| (i) |
exhibit its annual audited accounts, throughout each year, in a conspicuous place in every office and branch in Kenya; or |
| (ii) |
publish its annual audited accounts in a national newspaper within the number of months of the end of each financial year as prescribed under the minimum disclosure requirements prescribed from time to time by the Central Bank; |
|
| (h) |
failure of the institution to submit, not later than three months after the end of its financial year, to the Central Bank its annual audited accounts and a copy of the auditor’s report in the prescribed form;
|
| (i) |
failure of the institution to furnish, at such time and in such manner as the Central Bank may direct, such information in accurate and complete manner as the Central Bank may require to properly discharge its functions under the Act.
|
|
| (2) |
Monetary penalties on non-compliance with other directions not covered herein above may be levied by the Central Bank.
[L.N. 164/1999, r. 2.]
|
| 4. |
| (a) |
The Central Bank, after reviewing all available information and examining the existence of the contravention or violations of one or more of the provisions referred to herein, shall notify the institution in writing advising it of its findings and its decision to assess the penalties.
|
| (b) |
A notification under (a) above shall advise the institution of a reasonable time-frame within which the violation shall be rectified.
|
|
| 5. |
Following the notification and expiration of the time-frame designated in 4 above, or sooner if advised by the institution of the correction of the violation, the Director of Bank Supervision of the Central Bank shall instruct the institution, in writing, as to the amount of monetary penalties assessed and the manner in which such monies shall be paid to the Central Bank.
|
| 6. |
| (a) |
Where the Central Bank is not satisfied, either by evidence provided by the institution or information obtained by the Central Bank, that the violation has been rectified as directed, the daily monetary penalty prescribed in regulation 2(b) shall continue to accrue.
|
| (b) |
Once the Central Bank is fully satisfied that the violation has been rectified, the daily penalty shall cease to accrue and the institution shall be assessed the aggregate penalty.
|
|
THE BANKING (PENALTIES) REGULATIONS
| 1. |
These Regulations may be cited as the Banking (Penalties) Regulations and shall apply to all banks and other institutions licensed under the Act to conduct business in Kenya.
|
| 2. |
| (a) |
Any institution or other person who fails or refuses to comply with any directions given by the Central Bank under the Act shall be liable to a penalty not exceeding one million shillings in the case of an institution, or one hundred thousand shillings in the case of a natural person.
|
| (b) |
The Cabinet Secretary may prescribe additional penalties not exceeding ten thousand shillings in each case for each day or part thereof during which such failure or refusal continues.
|
|
| 3. |
(1) The following shall constitute specific violations by an institution of the directions given by the Central Bank which shall be subject to assessment of monetary penalties under these Regulations—
| (a) |
Loans, advances or other credit facilities granted by the institution to any person in excess of 25% of the institution’s core capital;
|
| (b) |
Outstanding unsecured advances to any of the institution’s employees or their associates;
|
| (c) |
Outstanding advances, loans or credit facilities which are unsecured or not fully secured—
| (i) |
to any of its officers or their associates; or |
| (ii) |
to any person of whom or of which any of its officers has an interest as an agent, principal, director, manager or shareholder; or |
| (iii) |
to any person of whom or of which any of its officers is a guarantor; |
|
| (d) |
Outstanding advance, loan or credit facility to any of its directors or other person participating in the general management of the institution which—
| (i) |
has not been approved by the full board of directors of the institution upon being satisfied that it is viable; |
| (ii) |
has not been made in the normal course of business and on terms similar to those offered to ordinary customers of the institution; and |
| (iii) |
has not been reported to the Central Bank within seven days thereof as being approved under (i) above; |
|
| (e) |
An aggregate of credit facilities to any one of the institution’s shareholders, directors, officers or employees which is in excess of twenty per cent of the institution’s core capital;
|
| (f) |
The aggregate of loans, advances and other credit facilities to share holders, directors, officers and employees is in excess of one hundred per cent of the institution’s core capital;
|
| (g) |
Failure of the institution to—
| (i) |
exhibit its annual audited accounts, throughout each year, in a conspicuous place in every office and branch in Kenya; or |
| (ii) |
publish its annual audited accounts in a national newspaper within the number of months of the end of each financial year as prescribed under the minimum disclosure requirements prescribed from time to time by the Central Bank; |
|
| (h) |
Failure of the institution to submit, not later than three months after the end of its financial year, to the Central Bank its annual audited accounts and a copy of the auditor’s report in the prescribed form;
|
| (i) |
Failure of the institution to furnish, at such time and in such manner as the Central Bank may direct, such information in accurate and complete manner as the Central Bank may require to properly discharge its functions under the Act.
|
|
| (2) |
Monetary penalties on non-compliance with other directions not covered herein above may be levied by the Central Bank.
[L.N. 164/1999, r. 2.]
|
| 4. |
| (a) |
The Central Bank, after reviewing all available information and examining the existence of the contravention or violations of one or more of the provisions referred to herein, shall notify the institution in writing advising it of its findings and its decision to assess the penalties.
|
| (b) |
A notification under (a) above shall advise the institution of a reasonable time-frame within which the violation shall be rectified.
|
|
| 5. |
Following the notification and expiration of the time-frame designated in 4 above, or sooner if advised by the institution of the correction of the violation, the Director of Bank Supervision of the Central Bank shall instruct the institution, in writing, as to the amount of monetary penalties assessed and the manner in which such monies shall be paid to the Central Bank.
|
| 6. |
| (a) |
Where the Central Bank is not satisfied, either by evidence provided by the institution or information obtained by the Central Bank, that the violation has been rectified as directed, the daily monetary penalty prescribed in regulation 2(b) shall continue to accrue.
|
| (b) |
Once the Central Bank is fully satisfied that the violation has been rectified, the daily penalty shall cease to accrue and the institution shall be assessed the aggregate penalty.
|
|
THE BANKING (DEPOSIT PROTECTION FUND) REGULATIONS
ARRANGEMENT OF REGULATIONS
| 3. |
Convening of Board meetings
|
| 4. |
Proceedings of the Board
|
| 5. |
Keeping of account and other records
|
| 6. |
Board to determine average deposit liabilities
|
| 7. |
Power of Board to waive contributions
|
| 8. |
Payments out of the Fund
|
| 9. |
Protected deposit defined
|
| 10. |
Liability of insolvent institution to the Board
|
| 11. |
Liquidator’s duty to the Board
|
| 12. |
Furnishing of information by a liquidator or an institution
|
| 13. |
Inspection of books, etc.
|
| 14. |
Revocation of L.N. 24/2002
|
THE BANKING (DEPOSIT PROTECTION FUND) REGULATIONS, 2003
| 1. |
Citation
These Regulations may be cited as the Banking (Deposit Protection Fund) Regulations, 2003.
|
| 2. |
Interpretation
In these Regulations, unless the context otherwise requires—
“Board” means the Deposit Protection Fund Board established under section 36 of the Act;
“contributory institution” means a bank, a mortgage finance company of financial institution which has received a notice to contribute under section 38(2) of the Act;
“Fund” means the Deposit Protection Fund established by section 37 of the Act.
|
| 3. |
Convening of Board meetings
Meetings of the Board shall be convened by the chairman not less than once in every three months, or whenever the business of the Fund so requires.
|
| 4. |
Proceedings of the Board
| (1) |
A quorum for any meeting of the Board shall be the four members and where the chairman is unable to attend any meeting of the Board the other members present may elect one of their number to be the chairman of the meeting.
|
| (2) |
The validity of any proceedings of the Board shall not be affected by any vacancy in the membership of the Board, or by any defect in the appointment of any member which is discovered subsequent to those proceedings.
|
| (3) |
The decision of the Board shall be authenticated by signature of the chairman or any other person authorized by the chairman for that purpose.
|
|
| 5. |
Keeping of account and other records
| (1) |
Subject to the Act and these Regulations, the Board shall—
| (a) |
keep proper accounts and proper records in relation to its accounts; and
|
| (b) |
in every financial year, prepare a statement of accounts showing its state of affairs, income and expenditure.
|
|
| (2) |
The accounts shall include contributions by contributory institutions and investment by the Fund.
|
| (3) |
A statement of accounts prepared in accordance with subregulation (1) shall be audited by auditors appointed by the Board.
|
| (4) |
For the purposes of this regulation, no person shall be appointed as an auditor unless he is qualified under section 161 of the Companies Act (Cap. 486) and is approved by the Central Bank.
|
| (5) |
Members of the Board appointed by the Minister under section 36(4)(c) of the Act shall hold office for a period of four years and shall be eligible for re-appointment.
|
| (6) |
The Board shall publish the report prepared under section 42(1) of the Act within three months of its submission to the Minister.
|
|
| 6. |
Board to determine average deposit liabilities
Subject to the Act, the average of a contributory institution’s total deposit liabilities shall be the amount which the Board determines as representing its average deposit liabilities over a period of twelve months preceding the levying of contributions.
|
| 7. |
Power of Board to waive contributions
The Board may waive a contribution by a contributory institution if it appears to the Board that an institution which is licensed is carrying on substantially the same business as that previously carried on by one or more institutions which are, or were contributory institutions, but nothing in these Regulations shall entitle any institution to a repayment of the contributions previously made to the Fund.
|
| 8. |
Payments out of the Fund
| (1) |
Whenever an contributory institution shall become insolvent in accordance with section 39(6) of the Act and if at that time the institution is a contributory institution whose deposits are protected, the Board shall, as soon as is practicable, pay out of the Fund by cash, cheque or bank transfer to a depositor who has a protected deposit with the institution an amount equal to his protected deposit.
|
| (2) |
In the event of uncertainty of records, the Board may only pay such percentage of the protected deposit as it may deem appropriate in the circumstances.
|
| (3) |
No account whatsoever shall be taken of any liability unless proof of the debt which gives rise to it has been given to the Board in such manner and at such times as the Board shall determine.
|
|
| 9. |
Protected deposit defined
| (1) |
Subject to the Act, and in relation to a contributory institution, any reference to a protected deposit is a reference to the total liability of the institution to the depositor limited to a maximum of one hundred thousand shillings:
Provided that the Minister may, by Order, and with the approval of the Board, increase the sum specified under this regulation to a sum specified in the Order.
|
| (3) |
In determining the liability of a contributory institution to a depositor, no account shall be taken of any liability in respect of a deposit if it is no longer protected or if it was made after termination of the protection of deposits of that institution under section 38(5) of the Act.
|
| (4) |
In all cases before termination of protection of deposit, the Board shall publish a notice in the Gazette and in one national newspaper of its intention to terminate protection of deposits in an institution.
|
| (5) |
Unless the Board otherwise directs, there shall be deducted the amount of any liability of a depositor to the contributory institution in respect of which a right of set-off existed immediately before the institution became insolvent in accordance with section 39 (6) of the Act against any such deposit or in respect of which such a right would then have existed if the deposit in question had been payable on demand and the liability in question had fallen due.
|
|
| 10. |
Liability of insolvent institution to the Board
| (1) |
Subject to the Act and these Regulations, where a contributory institution is insolvent and the Board has made or is under a liability to make an insolvency payment to a depositor, the institution shall become liable to the Board, as in respect of contractual debt incurred immediately before the institution became insolvent, for an amount equal to the Board’s liability.
|
| (2) |
In all cases, no payment shall be made by the insolvent institution to a depositor unless full satisfaction has been given to the Board in respect of all moneys paid by the Board to the depositor.
|
| (3) |
The liability of the insolvent contributory institution to a depositor shall be reduced by an amount equal to insolvency payment made or to be made by the Board to the depositor.
|
|
| 11. |
Liquidator’s duty to the Board
The duty of the liquidator of an insolvent contributory institution shall be to pay to the Board instead of the depositor the amount referred to under regulation 8, and if the amount paid to the Board equals the insolvency payment made to the depositor by the Board, the liquidator shall thereafter pay to the depositor instead of the Board any excess amount.
|
| 12. |
Furnishing of information by a liquidator or an institution
The Board may, by notice in writing served on an contributory institution or the liquidator of an insolvent institution, require him or such institution at such place as may be specified in the notice to furnish to the Board such information and such books, papers or records as the Board may require to carry out its functions under the Act.
|
| 13. |
Inspection of books, etc.
Where as a result of a contributory institution having become insolvent, any books, papers or records have come into the possession of the official receiver or liquidator he shall permit any person duly authorized by the Board to inspect such books, papers or records.
|
| 14. |
Revocation of L.N. 24/2002
The Banking (Deposit Protection Fund) (Amendment) Regulations, 2002 (L.N. 24/2002) are hereby revoked.
|
THE BANKING (DEPOSIT PROTECTION FUND) REGULATIONS
| 1. |
Citation
These Regulations may be cited as the Banking (Deposit Protection Fund) Regulations.
|
| 2. |
Interpretation
In these Regulations, unless the context otherwise requires—
“Board” means the Deposit Protection Fund Board established under section 36 of the Act;
“contributory institution” means a bank, a mortgage finance company of financial institution which has received a notice to contribute under section 38(2) of the Act;
“Fund” means the Deposit Protection Fund established by section 37 of the Act.
|
| 3. |
Convening of Board meetings
Meetings of the Board shall be convened by the chairman not less than once in every three months, or whenever the business of the Fund so requires.
|
| 4. |
Proceedings of the Board
| (1) |
A quorum for any meeting of the Board shall be the four members and where the chairman is unable to attend any meeting of the Board the other members present may elect one of their number to be the chairman of the meeting.
|
| (2) |
The validity of any proceedings of the Board shall not be affected by any vacancy in the membership of the Board, or by any defect in the appointment of any member which is discovered subsequent to those proceedings.
|
| (3) |
The decision of the Board shall be authenticated by signature of the chairman or any other person authorized by the chairman for that purpose.
|
|
| 5. |
Keeping of account and other records
| (1) |
Subject to the Act and these Regulations, the Board shall—
| (a) |
keep proper accounts and proper records in relation to its accounts; and
|
| (b) |
in every financial year, prepare a statement of accounts showing its state of affairs, income and expenditure.
|
|
| (2) |
The accounts shall include contributions by contributory institutions and investment by the Fund.
|
| (3) |
A statement of accounts prepared in accordance with subregulation (1) shall be audited by auditors appointed by the Board.
|
| (4) |
For the purposes of this regulation, no person shall be appointed as an auditor unless he is qualified under section 161 of the Companies Act (Cap. 486) and is approved by the Central Bank.
|
| (5) |
Members of the Board appointed by the Cabinet Secretary under section 36(4)(c) of the Act shall hold office for a period of four years and shall be eligible for re-appointment.
|
| (6) |
The Board shall publish the report prepared under section 42(1) of the Act within three months of its submission to the Cabinet Secretary.
|
|
| 6. |
Board to determine average deposit liabilities
Subject to the Act, the average of a contributory institution’s total deposit liabilities shall be the amount which the Board determines as representing its average deposit liabilities over a period of twelve months preceding the levying of contributions.
|
| 7. |
Power of Board to waive contributions
The Board may waive a contribution by a contributory institution if it appears to the Board that an institution which is licensed is carrying on substantially the same business as that previously carried on by one or more institutions which are, or were contributory institutions, but nothing in these Regulations shall entitle any institution to a repayment of the contributions previously made to the Fund.
|
| 8. |
Payments out of the Fund
| (1) |
Whenever an contributory institution shall become insolvent in accordance with section 39(6) of the Act and if at that time the institution is a contributory institution whose deposits are protected, the Board shall, as soon as is practicable, pay out of the Fund by cash, cheque or bank transfer to a depositor who has a protected deposit with the institution an amount equal to his protected deposit.
|
| (2) |
In the event of uncertainty of records, the Board may only pay such percentage of the protected deposit as it may deem appropriate in the circumstances.
|
| (3) |
No account whatsoever shall be taken of any liability unless proof of the debt which gives rise to it has been given to the Board in such manner and at such times as the Board shall determine.
|
|
| 9. |
Protected deposit defined
| (1) |
Subject to the Act, and in relation to a contributory institution, any reference to a protected deposit is a reference to the total liability of the institution to the depositor limited to a maximum of one hundred thousand shillings:
Provided that the Cabinet Secretary may, by Order, and with the approval of the Board, increase the sum specified under this regulation to a sum specified in the Order.
|
| (2) |
In determining the liability of a contributory institution to a depositor, no account shall be taken of any liability in respect of a deposit if it is no longer protected or if it was made after termination of the protection of deposits of that institution under section 38(5) of the Act.
|
| (3) |
In all cases before termination of protection of deposit, the Board shall publish a notice in the Gazette and in one national newspaper of its intention to terminate protection of deposits in an institution.
|
| (4) |
Unless the Board otherwise directs, there shall be deducted the amount of any liability of a depositor to the contributory institution in respect of which a right of set-off existed immediately before the institution became insolvent in accordance with section 39 (6) of the Act against any such deposit or in respect of which such a right would then have existed if the deposit in question had been payable on demand and the liability in question had fallen due.
|
|
| 10. |
Liability of insolvent institution to the Board
| (1) |
Subject to the Act and these Regulations, where a contributory institution is insolvent and the Board has made or is under a liability to make an insolvency payment to a depositor, the institution shall become liable to the Board, as in respect of contractual debt incurred immediately before the institution became insolvent, for an amount equal to the Board’s liability.
|
| (2) |
In all cases, no payment shall be made by the insolvent institution to a depositor unless full satisfaction has been given to the Board in respect of all moneys paid by the Board to the depositor.
|
| (3) |
The liability of the insolvent contributory institution to a depositor shall be reduced by an amount equal to insolvency payment made or to be made by the Board to the depositor.
|
|
| 11. |
Liquidator’s duty to the Board
The duty of the liquidator of an insolvent contributory institution shall be to pay to the Board instead of the depositor the amount referred to under regulation 8, and if the amount paid to the Board equals the insolvency payment made to the depositor by the Board, the liquidator shall thereafter pay to the depositor instead of the Board any excess amount.
|
| 12. |
Furnishing of information by a liquidator or an institution
The Board may, by notice in writing served on an contributory institution or the liquidator of an insolvent institution, require him or such institution at such place as may be specified in the notice to furnish to the Board such information and such books, papers or records as the Board may require to carry out its functions under the Act.
|
| 13. |
Inspection of books, etc.
Where as a result of a contributory institution having become insolvent, any books, papers or records have come into the possession of the official receiver or liquidator he shall permit any person duly authorized by the Board to inspect such books, papers or records.
|
| 14. |
Revocation of L.N. 24/2002
The Banking (Deposit Protection Fund) (Amendment) Regulations, 2002 (L.N. 24/2002) are hereby revoked.
|
THE BANKING (CREDIT REFERENCE BUREAU) REGULATIONS, 2020
PART I – PRELIMINARY
| 1. |
Citation
These Regulations may be cited as the Banking (Credit Reference Bureau) Regulations, 2020.
|
| 2. |
Interpretation
In these Regulations, unless the context otherwise requires —
"adverse action notice" means a notice issued by an institution to a customer conveying denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavourable change in the terms of coverage or amount of, any loan, existing or applied for, or any other action or determination adversely affecting the customer, based on customer information obtained from a bureau;
"agent" means an entity contracted by a Bureau and approved by the Central Bank to provide the services on behalf of the Bureau, in such manner as may be prescribed by the Central Bank;
"amendment notice" means a written notice from an institution advising a bureau of an amendment to credit information previously incorrectly reported to a bureau by that institution;
"bank" means a bank licensed under the Banking Act;
"bureau" means a credit reference bureau licensed under these Regulations to prepare or provide credit reports to credit information recipients based on data maintained by the bureau and to carry out such other activities as are authorised under these Regulations;
"Cabinet Secretary" means the Cabinet Secretary responsible for matters relating to finance;
"Central Bank" means the Central Bank of Kenya established by Article 231 - (1) of the Constitution;
"credit information" means any positive or negative information bearing on an individual's or entity's credit worthiness, credit standing, credit capacity, to the history or profile of an individual or entity with regard to credit, assets, and any financial obligations;
"credit information provider" means a person other than a subscriber who has been approved by the Central Bank to furnish credit information to a Bureau;
"credit report" means an electronic, written or other communication of any information by a credit reference bureau, relating to a person's creditworthiness, credit standing, credit capacity, character or general reputation which is used or collected to serve as a factor in establishing that person's eligibility for credit or other service or product provided by an institution or for such other purposes as may be permitted or required by law or contract;
"credit score" means a numerical expression of a customer's creditworthiness contained in a credit report;
"customer" means any consumer of services or products who has or had a formal engagement to receive services or products on agreed terms and conditions from an institution or a third party and includes a person who seeks to open an account with an institution;
"customer information" means credit information, or any other positive or negative information provided by a customer or obtained from an institution, a third party, or public record information, which may be exchanged pursuant to these Regulations;
"database" means a set of customer information collected, managed and disseminated by a bureau;
"day" means a calendar day;
"delinquent loan" means any loan which the principal or interest remains unpaid after the due date in accordance with the provisions of the Sacco Societies Act, 2008, and the Sacco Societies (Deposit-Taking Sacco Business) Regulations, 2010;
"director" means a member of the board of directors of a bureau;
"institution" for the purposes of these Regulations, means an institution within the meaning of section 2 of the Banking Act, section 2 of the Microfinance Act, 2006, and a Sacco society with the meaning of section 2 of the Sacco Societies Act, 2008;
"investigation" means, in respect to a bureau, a formal inquiry to an institution or third-party credit information provider on the authenticity of credit information submitted to the Bureau;
"loan" means direct, indirect and contingent obligations incurred by an individual or entity with third parties and includes any credit, discount, advance, overdraft, export bills purchased, other bills receivable or purchased, import bills, customers' liability on off balance sheet items or any other credit facility extended to a customer;
"microfinance bank" means a microfinance bank licensed under the Microfinance Act, 2006;
"negative information" means any adverse customer information relating to a customer which includes —
| (a) |
non-performing loan or credit default or late payment on all types of facilities or claims;
|
| (b) |
dishonour of, other than for technical reasons, cheques meant for settlement of credits in favour of institutions;
|
| (c) |
accounts compulsorily closed other than for administrative reasons;
|
| (d) |
cases of frauds and forgeries;
|
| (e) |
proven cases of cheque kiting;
|
| (f) |
false declarations and statements;
|
| (g) |
receiverships, bankruptcies and liquidations;
|
| (h) |
tendering of false securities; and
|
| (i) |
misapplication of borrowed funds.
|
"non-executive director" means a director who is not engaged in the day to day management of a bureau;
"non-performing loan" means —
| (a) |
pursuant to the Banking Act and Prudential Guidelines, 2013—
| (i) |
in respect of, loan accounts and other credit extensions having pre-established repayment programs, when principal or interest is due and unpaid for ninety days or more or interest payments for ninety days or more have been re- financed or rolled-over into a new loan;
|
| (ii) |
in respect of, current accounts, overdrafts, and other credit extensions not having pre-established repayment programs, when the balance exceeds the customers approved limit for more than ninety consecutive days, the customers borrowing line has expired for more than ninety days or interest is due and unpaid for more than ninety days; or
|
| (iii) |
in respect of, off-balance sheet items, when the off-balance sheet item crystallize and the customer's account is debited and the principal and interest is subsequently unpaid for ninety days or more;
|
|
| (b) |
pursuant to the Microfinance Act, 2006 and the Microfinance (Deposit Taking Microfinance Institutions) Regulations, 2008 a credit facility that is not generating income and the principal or interest is due and unpaid for, more than thirty days and includes a loan or credit facility classified either as substandard, doubtful or loss;
|
| (c) |
pursuant to the Sacco Societies Act, 2008, and the Sacco Societies (Deposit-Taking Sacco Business) Regulations, 2010, means a delinquent loan;
|
"notice of change" means a written notice sent by a bureau to an institution concerning a significant change to customer information that had previously been obtained by the institution from the Bureau for a period not exceeding twelve months prior to the date of the notice of change;
"notice of dispute" means a notice furnished to a subscriber or third party credit information provider by a bureau notifying the subscriber or the third party credit information provider that specified information submitted to the bureau by the subscriber or the third party credit information provider is disputed by the person to whom the information relates and requires the subscriber or the third party credit information provider to investigate the disputed information and respond to the bureau within the prescribed period;
"notice of resolution" means a written notice sent from an institution to a bureau, advising the results of an investigation the institution has made into customer information previously reported to the bureau by the institution where the customer has disputed the accuracy of information reported;
"officer" means any person who takes part in the general management of a bureau and includes a director, the secretary to the board, the chief executive officer, deputy chief executive officer, chief financial officer, chief information technology officer, chief internal auditor, or manager of a significant unit of the Bureau or a person with a similar level of seniority, position or responsibility;
"performing loan" means any loan which has not been classified as a non-performing loan under the Banking Act, the Microfinance Act, 2006, and the Sacco Societies Act, 2008;
"place of business" means any premises including the head office, branch, agency or such other premises as may be approved by the Central Bank, at which a bureau conducts its business;
"positive information" means any information on performing loan or other credit;
"regulator or supervisory authority" means an agency responsible for supervising institutions or credit reference bureaus;
"Sacco society" means a Sacco society within the meaning of section 2 of the Sacco Societies Act, 2008;
"significant shareholder" means a person other than the Government or a public entity, who holds directly or indirectly or otherwise has a beneficial interest in five percent or more of the share capital of a bureau or if it is proposed that such a person shall hold or have such a beneficial interest;
"subscriber" means an institution licensed under the Banking Act, the Microfinance Act or the Sacco Societies Act and has subscribed to receive customer information from a bureau.
"summary of rights" means a key facts document prepared by a bureau under regulation 29; and
"third-party credit information provider" means a credit information provider other than a subscriber.
|
PART II – ESTABLISHMENT AND LICENSING OF BUREAUS
| 3. |
Licensing of bureau business
| (1) |
A person shall not establish or operate a bureau business in Kenya or otherwise hold himself out to the public as engaging in any bureau business for the benefit of institutions unless such person is—
| (a) |
established and incorporated as a limited liability company under the Companies Act, 2015;
|
| (b) |
licensed under these Regulations; or
|
|
| (2) |
A person who contravenes the provisions of this regulation commits an offence and shall, on conviction, be liable to a fine of five hundred thousand shillings or to imprisonment for a term of two years or to both.
|
|
| 4. |
Application for a licence
| (1) |
A person seeking to conduct bureau business shall apply to the Central Bank for a license in the form set out in the First Schedule.
|
| (2) |
The applicant under paragraph (1) shall furnish the following information accompanied by supporting documents and such other information as may be required by the Central Bank —
| (a) |
certified copies of the applicant's certificate of incorporation and memorandum and articles of association;
|
| (b) |
a feasibility study by the applicant showing the organizational structure, internal control systems and monitoring procedures of the company with respect to—
| (ii) |
the ownership structure of the company; |
| (iii) |
governance and management structure of the company; |
| (v) |
business continuity plan; and |
| (vi) |
operation manuals of the business; |
|
| (c) |
sworn declarations by proposed directors, officers and significant shareholders in the form set out in the Second Schedule;
|
| (d) |
management processes, including—
| (i) |
development schedule of the software required for operation; |
| (ii) |
characteristics of products and services to be provided to subscribers; |
| (iii) |
service provision policies and procedures manuals; and |
| (iv) |
proposed security and control measures aimed at preventing misuse or improper management of information; |
|
| (e) |
overview of operations including the description of systems and the design of the data collection including the unique identification system for individuals and enterprises that is adequate to ease the collection of data and handling of the database;
|
| (f) |
a description of the applicant's premises and their suitability for customer service and the description of the security measures to be adopted;
|
| (g) |
the proposed fees and cost structure of products and services;
|
| (h) |
audited financial statements for the last three years where applicable;
|
| (i) |
a prototype of the final product that demonstrates the principal features and functions of the system;
|
| (j) |
a banker's cheque of ten thousand shillings payable to the Central Bank, being a non-refundable application processing fee; and
|
| (k) |
evidence that the applicant has adequate capital to conduct the business.
|
|
| (3) |
Operations manuals prepared under this regulation shall —
| (a) |
ensure the accuracy of the information contained in the applicant's database;
|
| (b) |
the timely updating of information held in the applicant's database through signing of contracts with information sources approved by the Central Bank; and
|
| (c) |
include query module manual, data loading module manual, source quality control manual, maintenance module manual, security module manual, operating manual, user manual, data privacy manual and manual for procedures for handling complaints.
|
|
|
| 5. |
Review of application
| (1) |
On receipt of an application under regulation (4), the Central Bank shall, within fourteen days from the date of receipt of the application, review the application and notify the applicant, where necessary, of any missing information which the applicant ought to have provided.
|
| (2) |
When reviewing an application under paragraph (1), the Central Bank shall take into consideration all relevant matters including —
| (a) |
the background, reputation, integrity, experience and capacity of the proposed significant shareholders, directors and senior officers of the applicant;
|
| (b) |
the business plan of the applicant, including plans to undertake national coverage, the applicant's roll-out plan and a mechanism to integrate, gather, input, update and validate data;
|
| (c) |
the design of data collection for customer information and flexibility in structuring the information;
|
| (d) |
the adequacy of the applicant's capital structure;
|
| (e) |
the availability of human, financial and operational resources necessary for the effective and efficient conduct of bureau business;
|
| (f) |
the existence of adequate infrastructure for the collection of information and preparation of credit reports;
|
| (g) |
the ability of the applicant to maintain the confidentiality of customer information; and
|
| (h) |
the applicant's ability to conduct effective due diligence and identity verification on any person seeking credit information from the applicant.
|
|
|
| 6. |
Inspection of systems and premises
The Central Bank shall carry out an on-site inspection of the applicant's premises to determine the adequacy of the applicant's safety and security systems and to confirm—
| (a) |
the suitability of the premises for bureau operations;
|
| (b) |
the adequacy of the applicant's management information system, administrative and operational processes and internal control systems;
|
| (c) |
the security of information held by the applicant; and
|
| (d) |
the separation of the proposed bureau business from any other business carried out by the applicant or the applicant's associates.
|
|
| 7. |
Issuance of licence
| (1) |
Where the Central Bank is satisfied that the applicant meets the requirements for licensing, it shall issue an interim license in the form of a letter of intent to the applicant.
|
| (2) |
Where an applicant is issued with a letter of intent, the Central Bank shall notify the applicant to submit —
| (a) |
a banker's cheque for one hundred thousand shillings payable to the Central Bank being licence fee;
|
| (b) |
a statutory declaration by the applicant's chief executive officer in the form set out in the Third Schedule.
|
|
| (3) |
Where the applicant complies with the requirements of paragraph (2), the Central Bank shall issue a licence to conduct bureau business to the applicant.
|
| (4) |
The Central Bank may impose conditions on a licence issued under this regulation as the Central Bank may consider necessary and may, at any time, add, vary or substitute such conditions.
|
| (5) |
The Central Bank shall determine an application for a licence within ninety days from the date of receipt of information required under these Regulations:
Provided that a licence shall not be granted where the applicant has not fully established the physical structure necessary to conduct bureau business including management information system.
|
| (6) |
Where the Central Bank declines to issue a licence, it shall state the grounds of refusal in writing and where applicable, advise the applicant of the necessary action to be taken before submitting a fresh application for a licence.
|
|
| 8. |
Bank guarantees
| (1) |
Where a bureau is licensed under these Regulations, it shall, within thirty days of being granted the licence, submit to the Central Bank an irrevocable bank guarantee of one million shillings from a bank or a microfinance bank and such form as may be specified by the Central Bank.
|
| (2) |
Where a bureau is required to pay a penalty under these Regulations and fails to do so within the time specified by the Central Bank, the Central Bank may recover the amount due on the penalty from the bank guarantee issued under paragraph (1).
|
| (3) |
Where a penalty has been recovered from a bank guarantee in accordance with paragraph (2), the bureau shall, within thirty days of being notified, furnish the Central Bank with a new irrevocable bank guarantee of one million shillings in such form as may be specified by the Central Bank.
|
| (4) |
Where a bureau fails to comply with the provisions of this regulation, its licence shall be revoked.
|
|
| 9. |
Refusal to issue a license
| (1) |
A person aggrieved by the refusal of the Central Bank to issue a licence under these regulations may, within twenty-one days from the date of the refusal, apply to the Cabinet Secretary in writing for a review of the Central Bank's decision.
|
| (2) |
The Cabinet Secretary shall, while considering an application under paragraph (2), consider the material in the administrative record relating to the application for a license and may invite the Central Bank or the applicant or both to make presentations with respect to the application for review.
|
| (4) |
The Cabinet Secretary may reverse the decision of the Central Bank if—
| (a) |
the Central Bank failed to follow the laid down procedure;
|
| (b) |
the decision was contrary to law;
|
| (c) |
there was no factual basis for the decision; or
|
| (d) |
based on a review of the record, there was a manifest error in the assessment of facts relating to the application for registration; or
|
| (e) |
based on a review of the record, the Central Bank abused its discretion.
|
|
| (5) |
A person dissatisfied by the decision of the Cabinet Secretary may appeal to the High Court against the decision and the decision of the High Court shall be final.
|
|
| 10. |
Notification of licensed bureaus
The Central Bank shall, within thirty days from the date a licence has been issued to a bureau, by notice in the Gazette, notify members of the public of the name of the bureau and the date the licence was issued.
|
| 11. |
Revocation or suspension of licenses
| (1) |
The Central Bank may suspend or revoke a licence issued to a bureau if the bureau—
| (a) |
does not commence business within twelve months from the date it was issued with a license;
|
| (b) |
has ceased or suspended operations for a period exceeding three months;
|
| (c) |
obtained the licence by providing wrong, false or misleading information or the concealment of material information which, if known at the time of evaluating the application for a licence, the bureau would not have been granted a licence;
|
| (d) |
applies to the Central Bank for the revocation or suspension of the licence;
|
| (e) |
has ceased to meet the requirements prescribed in these Regulations;
|
| (f) |
has failed to comply with any conditions imposed on the licence;
|
| (g) |
is insolvent or unable to effectively conduct its operations;
|
| (h) |
has contravened the provisions of the Act, the Microfinance Act, 2006, the Sacco Societies Act, 2008, these Regulations or any other relevant written law;
|
| (i) |
has engaged in activities which are restricted or not permitted under these Regulations;
|
| (j) |
is unable or has consistently failed to protect the confidentiality of data or information in its possession or control;
|
| (k) |
has, without the consent of the Central Bank, amalgamated with another entity or sold or otherwise transferred its business, assets or liabilities to another entity;
|
| (l) |
has had a winding-up order made against it or a resolution for the voluntary winding up of the bureau has been passed by its shareholders;
|
| (m) |
has used the information in its possession or control for any purpose which is not permitted by these Regulations; or
|
| (n) |
fails to pay the annual licence fee in accordance with these Regulations.
|
|
| (2) |
Before the Central Bank revokes or suspends the licence of a bureau, the Bureau shall be given an opportunity to make representations as to why the licence should not be revoked or suspended and the Central Bank shall take into consideration the representations made by the bureau in its decision on the matter.
|
| (3) |
The Central Bank may, in lieu of revoking or suspending the licence, require the bureau to take such measures as may be necessary to regularise the breach or violation within such period as the Central Bank may specify and impose such monetary or other sanctions as it may consider necessary in the circumstances.
|
| (4) |
The Central Bank shall, within seven days of suspending or revoking a license, inform the affected bureau of the suspension or revocation.
|
| (5) |
The Central Bank shall, upon revocation of the licence of a Bureau, take over control of the business of the bureau to safeguard the information in the bureau's possession or control and facilitate the winding up of the bureau business.
|
| (6) |
Where the Central Bank takes over the bureau business under paragraph (5), the bureau shall hand over the entire database in a format as the Central Bank may specify and shall thereafter erase all data in its database in the manner specified by the Central Bank.
|
| (7) |
Where a licence is revoked by the Central Bank, the holder of the licence shall, within seven days from the date of being notified of the revocation, surrender the licence to Central Bank and shall cease to carry out bureau business or any other activity authorized under these Regulations.
|
| (8) |
A person who fails to comply with paragraph (7) commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand shillings or to imprisonment for a term not exceeding two years or to both.
|
| (9) |
The Central Bank shall publish in the Gazette a notice of the suspension or revocation of a license issued under these Regulations and the grounds for the suspension or revocation.
|
|
| 12. |
Annual license fee
| (1) |
In this regulation, "anniversary date" means the period ending on the 31st December of each year.
|
| (2) |
A bureau shall be required to pay to the Central Bank an annual licence fee of one hundred thousand shillings.
|
| (3) |
The annual licence fee shall be paid on or before the anniversary date.
|
| (4) |
Where a bureau fails to pay the annual license fee by the end of the anniversary date, it shall pay a fee of two hundred thousand shillings within ninety days from the end of the anniversary date.
|
| (5) |
The Central Bank shall revoke the license of a bureau that fails to pay the annual license fee and, in the case of such failure, the fee prescribed by paragraph (4).
|
|
| 13. |
Fees not refundable or payable pro rata
Any fees payable to the Central Bank under these Regulations shall not be—
| (a) |
refundable where the licence is cancelled or revoked or a Bureau ceases to carry on business at any time before the end of the year;
|
| (b) |
shall not be payable on a pro rata basis if the licence fee is paid in the course of the year for the commencement of bureau business:
|
Provided that for a bureau that was in existence on the date of the commencement of these Regulations, the annual licence fees already paid shall be prorated up to the 31st December 2020.
|
| 14. |
License non-transferable
| (1) |
A person shall not transfer a licence granted to him by the Central Bank to another person.
|
| (2) |
A person who contravenes paragraph (1) commits an offence and shall be liable, on conviction, to a fine not exceeding five hundred thousand shillings.
|
|
PART III – OPERATION OF BUREAUS
| 15. |
Activities of bureaus
| (1) |
A bureau licensed under these Regulations may, in the conduct of bureau business—
| (a) |
obtain and receive customer information;
|
| (b) |
store, manage, evaluate, update and disseminate customer information to subscribers in accordance with these Regulations;
|
| (c) |
compile and maintain a database of customer information;
|
| (d) |
generate reports from the customer information database;
|
| (e) |
develop a credit score for every customer whose credit information has been submitted to the bureau.
|
| (f) |
sell to institutions specialized literature and other information material related to its activities;
|
| (g) |
carry out, on its own or with another person approved by the Central Bank, market and statistical research relating to matters set out under these Regulations;
|
| (h) |
conduct Know Your Customer due diligence on behalf of another person; and
|
| (i) |
carry out any other activity as may be approved by the Central Bank in accordance with the Act, the Microfinance Act, 2006, the Sacco Societies Act, 2008, these Regulations or any other relevant written law.
|
|
| (2) |
A bureau shall not engage in any activity that is not specified in these Regulations or approved by the Central Bank in accordance with the Act, the Microfinance Act, 2006, the Sacco Societies Act, 2008, these Regulations or any other relevant written law.
|
| (3) |
Where a bureau fails to comply with paragraph (3) it shall be liable to pay a penalty of five hundred thousand shillings and in the case of continued failure, it shall be liable to an additional penalty of ten thousand shillings for each day on which such failure continues.
|
|
| 16. |
Use of agents
| (1) |
A bureau may contract an agent for the following purposes —
| (a) |
delivery of credit reports to requesting persons in accordance with these Regulations;
|
| (b) |
sensitization of customers, institutions and other credit information providers;
|
| (c) |
receiving and channelling complaints; and
|
| (d) |
any other purpose as may be approved by the Central Bank on application by the bureau.
|
|
| (2) |
A bureau shall not contract an agent unless the proposed agent has been approved by the Central Bank:
Provided that a person who has been approved by the Central Bank as an agent under the Banking Act or the Microfinance Act shall not need to be approved by the Central Bank for the purposes of rendering services under these Regulations but a bureau shall be required to obtain a letter of no objection from the Central Bank in respect of such an agent.
|
| (3) |
An application for approval of an agent shall be accompanied by a report on the suitability assessment of the proposed agent, the services to be rendered by the proposed agent and the application fees set out in the Third Schedule.
|
| (4) |
A bureau shall, at least two months before the end of each year, apply to the Central Bank for the renewal of the approval of its agents and shall submit a list of its agents whose approvals it wishes be renewed and the annual renewal fees for each agent set out in the Third Schedule.
|
| (5) |
A person is not qualified to be appointed as an agent of a bureau if that person —
| (a) |
is a minor or of unsound mind;
|
| (b) |
has been convicted of an offence involving theft, fraud, forgery, causing financial loss or perjury;
|
| (c) |
has not been vetted in such manner as may be prescribed by the Central Bank;
|
| (d) |
has been removed from any office on account of misconduct, abuse of office, corruption or incompetence in the preceding ten years; or
|
| (e) |
for such other reasons as may be prescribed in the Guidelines.
|
|
| (6) |
A bureau shall ensure that no agent has unlimited access to credit information in the possession or control of the bureau.
|
| (7) |
A bureau shall only grant an agent access to a customer's credit information upon the agent's lawful request or for the purposes of a lawful transaction under these Regulations.
|
| (8) |
A bureau shall conduct a suitability assessment on the capabilities of an agent and shall satisfy itself as to the —
| (a) |
existence of adequate infrastructure for the collection of information and delivery of credit reports by the agent;
|
| (b) |
ability of the agent to maintain the confidentiality of customer credit information; and
|
| (c) |
ability to conduct proper and sufficient due diligence and identity verification with respect to any person requesting customer credit information.
|
|
| (8) |
A bureau shall contract each agent on a non-exclusive basis.
|
| (10) |
The Central Bank may prescribe guidelines for the contracting and operations of agents.
|
|
| 17. |
Actions requiring prior approval
| (1) |
A bureau shall apply to the Central Bank in writing for approval before conducting any of the following activities —
| (a) |
the appointment of directors and officers of the bureau;
|
| (b) |
the acquisition of at least five per cent of the shares of a bureau by any person except as may be authorised by the Central Bank under these Regulations;
|
| (c) |
the opening, relocation or closure of a place of business in or outside Kenya;
|
| (d) |
the temporary closure of a place of business;
|
| (e) |
the appointment of agents;
|
| (f) |
changes in the memorandum and articles of association of the bureau;
|
| (g) |
the passing of a shareholders' resolution to voluntarily wind up the bureau;
|
| (h) |
the introduction of new products or services;
|
| (i) |
fees payable by customers and any increase of such fees;
|
| (j) |
arrangements or agreements—
| (i) |
for the sale, transfer or disposal of the shares or business of the Bureau; or a merger, amalgamation, acquisition, take over or assignment; and |
| (ii) |
affecting the voting power, management or other matters which may result in a change in the control or management of the Bureau. |
|
|
| (2) |
With respect to the permanent closure of a place of business, a bureau shall notify the Central Bank three months before the closure.
|
| (3) |
With respect to the temporary closure of a place of business, a bureau shall notify the Central Bank at least seven days before the closure or such other shorter period as the Central Bank may approve in the circumstances.
|
|
| 18. |
Nature of information to be shared
| (1) |
Bureaus may share customer information, including positive and negative credit information, only in accordance with these Regulations and such customer information may include the following details—
| (a) |
the customer's identity, including —
| (i) |
in the case of a natural person, the person's name, date of birth, national identity card number, personal identification number issued under the Tax Procedures Act, 2015 (No. 29 of 2015), passport number, driving licence number, previous and current addresses, and any other contact details; and |
| (ii) |
in the case of a customer who is not a natural person, the customer's name, registration number, personal identification number issued under the Tax Procedures Act, 2015 (No. 29 of 2015), names of directors, shareholders holding more than five per cent of its shares or partners, trustees or officials, former and current addresses, and any other contact details; |
|
| (b) |
the customer's credit status including the nature and amounts of loans or advances and other credit facilities advanced or granted, amounts outstanding thereof, credit application and related matters;
|
| (c) |
the nature and details of any security or securities taken or proposed to be taken by an institution as security for the loans, advances and other credit facilities;
|
| (d) |
details of payment of credit facilities or default in payment by the customer, debt restructuring and actions taken by the institution to recover unpaid amounts including realization of securities, legal proceedings and related matters; and
|
| (e) |
identity details of the shareholders, directors, partners or officials of a corporate entity or unincorporated entity which has defaulted in repaying its credit facility.
|
|
| (2) |
An institution, third party credit information provider or any other person shall not submit to any bureau any negative credit information of a customer or any other person where the amount related to the credit information does not exceed one thousand shillings.
|
| (3) |
A bureau shall include a customer's credit score in every credit report prepared with respect to that customer.
|
| (4) |
A bureau shall furnish customer information using a format approved by the Central Bank.
|
| (5) |
An institution or third-party credit information provider submitting credit information to a bureau shall ensure that such information is complete and accurate.
|
| (6) |
An institution or third-party credit information provider that submits incomplete or inaccurate information to a bureau shall be liable to such penalty as the Central Bank may impose.
|
| (7) |
The Cabinet Secretary may, on the recommendation of the Central Bank, by notice in the Gazette, suspend some aspects of exchange of negative information under paragraph (1) for such a period and for such reasons as the Cabinet Secretary may specify.
|
|
| 19. |
Identification details
Any credit information of a person shall be submitted to a bureau with such identification details as would enable the bureau to link the customer to all the customer's transactions with any other person.
|
| 20. |
Protection from liability
| (1) |
A suit, prosecution or other legal proceedings shall not lie against the Central Bank, bureau, an institution or chairperson, director, member, auditor, adviser, officer or other employee or agent of the Central Bank, such bureau or institution or any other person authorised under these Regulations to submit, receive, use or share credit information, for any loss or damage caused or is likely to be caused by anything which is done or intended to be done in good faith in pursuance of these Regulations or guidelines issued hereunder.
|
| (2) |
Nothing contained in paragraph (1) shall affect the right of any person to make a claim against the Central Bank, a bureau, an institution or chairperson, director, member, auditor, adviser, officer or other employee or agent of the Central Bank, such bureau or institution, as the case may be, in respect of loss or damage caused to him on account of any such disclosure made by anyone of them and which is unauthorised or fraudulent or contrary to provisions of these Regulations, guidelines or any other law to which these Regulations relate.
|
| (3) |
A person who has been made liable for the acts or omissions of another person may seek indemnity from the person who was at fault.
|
|
| 21. |
Prohibited information
| (1) |
A bureau shall not include in its database or a credit report personal information of a customer relating to race, belief, colour, ethnic origin, religion, political affiliation, sexual orientation, physical and mental handicaps, state of health or medical information.
|
| (2) |
Despite paragraph (1), any information relating to Sharia-compliant products shall not be considered to contravene this regulation.
|
|
| 22. |
Form of consent
| (1) |
Where the consent of a customer is required under these Regulations for the submission or sharing of credit information, such consent may be obtained by the customer signing any document giving express consent or authorisation for the sharing of credit information.
|
| (2) |
The documents under paragraph (1) may include account-opening documents, loan application forms, loan agreements or any other agreement document between an institution and the customer or the customer and a third-party credit information provider or by any other documentary means as may be convenient or agreeable between the parties.
|
| (3) |
A customer may give consent through oral, print or electronic means, subject to the satisfaction of the Bureau or institution as to the authenticity of the electronic consent.
|
|
| 23. |
Disclosures
| (1) |
A bureau or agent shall, before making a disclosure under these Regulations, require a customer to identify himself or herself.
|
| (2) |
A disclosure by a bureau or agent may be made in writing, in person, during normal business hours, and, on reasonable notice, by telephone, email or any other electronic means, if available to the Bureau or agent, as the requesting person may choose.
|
| (3) |
The customer may be accompanied by one other person of his or her choice, who shall furnish reasonable identification before he or she is allowed, on the instructions of the customer, to have access to the customer information.
|
| (4) |
A bureau or agent shall require the customer to grant written or oral permission to discuss the customer's information whenever a third party is present and where the third party is authorised to act on behalf of the customer in respect of the customer's information.
|
| (5) |
A bureau shall appoint trained personnel to explain to the customer any information furnished to the customer where such explanation is needed by the customer.
|
|
| 24. |
Other sources of information
| (1) |
A bureau may, with the approval of the Central Bank, collect, receive, collate, compile and disseminate information relating to a customer which is obtained from a third party or is ordinarily available to the public, including information from public entities including —
| (a) |
the Business Registration Service established under the Business Registration Service Act, 2015 (No. 15 of 2015);
|
| (b) |
registrar of business entities;
|
| (c) |
business and trade licensing authorities;
|
| (d) |
Land Registrars appointed under section 12 of the Land Registration Act, 2012 (No. 3 of 2012);
|
| (e) |
the Kenya Revenue Authority established under the Kenya Revenue Authority Act, 1995 (No. 2 of 1995);
|
| (f) |
county governments and county government entities;
|
| (g) |
court registries in respect of information on judgments on debts, insolvency or bankruptcy proceedings or winding up orders;
|
| (h) |
registration officers appointed under the Registration of Persons Act, (Cap. 107);
|
| (i) |
other relevant public bodies.
|
|
| (2) |
An application for the approval of a third-party credit information provider shall be accompanied by the application fees specified in the Fourth Schedule and a suitability assessment report detailing the information set out in paragraph (4).
|
| (3) |
A Government ministry, department or agency, public entity and other credit information provider may enter into contracts with bureaus for the provision of information and such contract shall specify —
| (a) |
the conditions for the provision of information;
|
| (b) |
the obligation to furnish accurate and updated information;
|
| (c) |
the obligation to promptly correct any information submitted to the bureau which is inaccurate, false, misleading or erroneous in any form, or has been overtaken by events;
|
| (d) |
details on data to be provided; and
|
| (e) |
the manner and form through which the information shall be submitted to the bureaus.
|
|
| (4) |
A bureau shall, before engaging a third-party credit information provider, carry out due diligence and suitability assessment of the third-party credit information provider and establish —
| (a) |
the nature and character of the third-party credit provider's ownership and management;
|
| (b) |
the nature of the third-party credit provider's business and whether it is subject to any legal or regulatory framework;
|
| (c) |
the soundness of the third-party credit provider's information management system in relation to generation, storage and transmission of customer information;
|
| (d) |
the accuracy and integrity of the third-party credit provider's records;
|
| (e) |
the credibility of credit information of every person the third-party credit provider deals with;
|
| (f) |
whether the third-party credit provider's customers have expressly consented to the sharing of the customers' credit information;
|
| (g) |
whether the third-party credit provider's customers are fully aware of the terms and conditions of customers' relationships with the third-party credit information provider with respect to credit information sharing; and
|
| (h) |
any other matter as the Central Bank may specify.
|
|
| (5) |
A bureau shall not contract a third-party credit information provider whose customer's financial or credit information is occasionally based on estimates or is subject to assessment before ascertaining the completeness of the information.
|
| (6) |
A third-party credit information provider shall not furnish any credit information of a customer to a bureau or its agent except with the prior written consent of the customer.
|
| (7) |
The Central Bank may, if it considers it necessary, prohibit a bureau from receiving credit information or disseminating credit information to or from any third-party credit information provider or a public entity.
|
| (8) |
A third-party credit information provider shall be subject to such industry code of conduct as the Central Bank may approve.
|
|
| 25. |
Use of public data by bureaus
| (1) |
A bureau may obtain information from public and non-public sources and include public information in any report prepared under these Regulations:
Provided that before including such information —
| (a) |
the bureau shall take such reasonable measures to confirm the accuracy and authenticity of the information from a source that has independent and direct knowledge of the information; and
|
| (b) |
the bureau shall, where such information relates to any court proceeding of a civil or criminal nature or any public record, verify the accuracy and authenticity of the information not more than twenty-one days before the date on which the information is included in any report.
|
|
| (2) |
Each bureau shall periodically report to the Central Bank the sources and details of the public data included in its reports and the measures or process undertaken confirm the accuracy and authenticity of the data.
|
| (3) |
Where a bureau has included in any report information from public sources, and the Central Bank is satisfied that a bureau did not take all reasonable measures to confirm the accuracy and authenticity of the data, the Central Bank shall direct the Bureau to delete the information from its database and, in addition, impose a penalty not exceeding five hundred thousand shillings.
|
|
| 26. |
Duty to notify customer of furnishing of negative information to bureau
| (1) |
A credit information provider who furnishes negative information to a bureau with respect to a customer shall, in writing or through electronic means, notify the customer of the intention to submit the negative information at least thirty days before submitting the negative information to the bureau or within such shorter period as the contract between the credit information provider and the customer may provide.
|
| (2) |
The provisions of paragraph (1) shall not be mandatory with respect to the furnishing of positive information of a customer to a bureau by a credit information provider.
|
| (3) |
A credit information provider shall not furnish any information relating to a customer to any bureau if the credit information provider knows or has reasonable cause to believe that the information is inaccurate.
|
| (4) |
A credit information provider shall not furnish information relating to a customer to any bureau if the credit information provider has been notified by the customer, in writing or verbally, at the address specified by the credit information provider for such notices, that the specific information is inaccurate.
|
| (5) |
Despite paragraph (4), the credit information provider may submit the credit information to a bureau once it has addressed the customer's concern on the inaccuracy of the credit information —
| (a) |
by re-affirming the accuracy of the information to the customer; or
|
| (b) |
by rectifying the inaccuracy.
|
|
| (6) |
Where the credit information provider has been notified of any inaccuracy in the credit information and there is reasonable cause to believe that the information may not be accurate, the credit information provider shall inform all the bureaus to which the information has already been submitted of this fact within five days from the date of the notification and shall, within fourteen days, carry out investigations and inform the bureaus of the outcome of the investigation.
|
| (7) |
A credit information provider shall —
| (a) |
correct any inaccurate or erroneous information when the inaccuracy or erroneousness of information comes to the credit information provider's knowledge or attention; and
|
| (b) |
notify the bureaus within five days from the date of learning of the inaccurate or erroneous information.
|
|
| (8) |
A bureau that has been notified under paragraph (7) of inaccurate or erroneous information shall update its database within two working days of the date of the notification.
|
| (9) |
A credit information provider who has furnished credit information to a bureau shall, within thirty days from the date the information was furnished to a bureau, notify the customer that the customer's credit information has been forwarded to the bureau.
|
| (10) |
A credit information provider which intentionally, recklessly or negligently submits inaccurate information to a bureau or which, after being notified by a customer, does not adequately address the inaccuracy or erroneousness of information submitted or to be submitted to a bureau, shall be barred by the Central Bank or the relevant bureau from submitting credit information to that bureau or any other bureau.
|
|
| 27. |
Confidentiality of customer information
| (1) |
A bureau shall protect the confidentiality of customer information in its possession or control under these Regulations and only report or release such information —
| (c) |
to a requesting subscriber;
|
| (d) |
to a third party as authorised by the customer concerned; or
|
| (e) |
as required by the Act, Microfmance Act, 2006, the Sacco Societies Act, 2008, these Regulations or any other relevant written law.
|
|
| (2) |
Except as otherwise provided under paragraph (1), a director, member, officer or other employee or agent employed in the business of a bureau or a subscriber shall not disclose any information to any person and this obligation shall continue to apply even after termination of tenure, employment or relationship with the bureau or subscriber.
|
| (3) |
A director, member, officer or other employee or agent of a bureau or subscriber who contravenes the provisions of paragraph (2) commits an offence and shall be liable, upon conviction, to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred thousand shillings, or to both.
|
| (4) |
The Central Bank may, in lieu of prosecution under paragraph (3), impose such sanctions against the bureau, subscriber, director, member, officer, other employee or agent as the Central Bank may deem fit including terminating the tenure or services of the director, member, officer, other employee or agent of the bureau.
|
|
| 28. |
Responsibilities of a bureau
| (1) |
| (a) |
utilize the information collected solely for the purposes set out in these Regulations;
|
| (b) |
take reasonable measures to ensure that customer information maintained by it is protected from unauthorized access, use, modification or disclosure;
|
| (c) |
ensure that customer information maintained by it is not charged or encumbered for any purpose;
|
| (d) |
ensure that customer information is obtained from reliable and credible sources which take responsibility for the accuracy, completeness and timeliness of the information;
|
| (e) |
observe, through its shareholders, directors, officers, employees or agents, a perpetual duty of confidentiality with regard to all customer information;
|
| (f) |
accept without charge the filing of customer credit information from the customer for the purpose of correcting or challenging information otherwise held by that bureau concerning that customer;
|
| (g) |
take reasonable measures to verify the accuracy of any customer credit information submitted to it;
|
| (h) |
retain customer credit information submitted to it for the prescribed period, irrespective of whether that information reflects positively or negatively on the consumer;
|
| (i) |
maintain records of customer credit information in accordance with the Act, these Regulations or any other relevant written law;
|
| (j) |
promptly expunge from its records any prescribed customer credit information that is not permitted to be entered in its records or is required to be removed from its records in accordance with the Act, the Microfinance Act, 2006, the Sacco Societies Act, 2008, these Regulations or any other relevant written law;
|
| (k) |
issue a report to any person who requires it for a prescribed purpose or a purpose contemplated in these Regulations, upon payment of the bureau's fee except where such a fee has been specified;
|
| (l) |
not knowingly, recklessly or negligently provide a report to any person containing inaccurate information;
|
| (m) |
establish and maintain a complaints' resolution mechanism including by establishing a dispute resolution unit to handle queries or complaints and a dedicated telephone line for contact purposes;
|
| (n) |
include in every report issued, the name of the institution or third-party credit information provider which has submitted a negative credit information on any person;
|
| (o) |
maintain a database which can be searched using either a natural person's national identity card number, passport number, Personal Identification Number issued under the Tax Procedures Act, 2015 (No. 29 of 2015), or any other valid identification number and in the case of a corporate entity or any other unincorporated entity, the Personal Identification Number of the entity and the identity card numbers and Personal Identification Numbers of their respective directors or officials, as the case may be;
|
| (p) |
not keep in its database such customer information which ought not to be kept in the database;
|
| (q) |
not delete or remove from its database any credit information which ought to remain in its database;
|
| (r) |
not issue a credit report that erroneously represents the status of credit information of a customer; and
|
| (s) |
analyze information submitted to it and establish any existing relationships between corporate entities, unincorporated entities and natural persons whose data has been submitted to the bureau.
|
|
| (2) |
A bureau shall enter into a non-exclusive agreement or arrangement with a third-party credit information provider for credit information sharing and any other bureau may also enter into a similar agreement or arrangement with the same third-party credit information provider for credit information sharing.
|
| (3) |
A bureau shall only release customer information to a subscriber—
| (a) |
that requires the customer information to —
| (i) |
evaluate the customer's application for credit or other customer-initiated business transaction; |
| (ii) |
for the recovery of any sum due to the institution; |
| (iii) |
for customer account management, fraud detection and prevention, credit rating, employment evaluation, tracing owners of unclaimed assets, development of a scoring system, assessment of a debtor's books of business; and |
| (iv) |
for any other purpose approved by the Central Bank; |
|
| (b) |
that has certified to the bureau that it shall use the customer information for the purpose of making a lawful or permitted decision only; and
|
| (c) |
that has agreed to properly destroy customer information in such a manner that it cannot reasonably be read or reconstructed.
|
|
| (4) |
A bureau shall not, in the first instance, charge any fee in respect of a clearance certificate issued to a person for any purpose.
|
| (5) |
A bureau which fails or refuses to comply with the provisions of this regulation shall be liable to pay a penalty not exceeding five hundred thousand shillings and any other administrative sanction as the Central Bank may determine.
|
|
| 29. |
Customer rights
| (1) |
Each bureau shall prepare a summary of the rights of customers.
|
| (2) |
The summary of the rights prepared under paragraph (1) shall include a description of —
| (a) |
the right of a customer to obtain a free copy of a credit report from the bureau;
|
| (b) |
the frequency and circumstances under which a customer is entitled to receive a credit report from the bureau, with or without charge;
|
| (c) |
the right of a customer to dispute information about the customer held by the bureau;
|
| | |
