LIQUIDITY CRISIS FEARED
Kenya banks face deposit-limiting bill
Nairobi — A new row is brewing between Kenyan banks and parliament after an MP proposed restricting deposits by state-owned companies, months after the state imposed a cap on lending rates. Public Investments Committee vice-chairman Kimani Ichungw’a drafted a bill seeking to bar state-owned corporations from investing or depositing public funds with lenders in which the government has a stake of less than 20%. "The bill seeks to provide that a public body may only deposit funds and invest surplus funds in government-owned banks," he said on Monday. "The bill defines a government-owned bank as a bank in which the government owns or holds at least 20% of the shares of the bank." Shares in Kenya’s biggest banks have fallen as much as 27% since the government introduced a law on August 24 capping commercial lending rates at 400 basis points above the official benchmark rate. The proposed new law will result in government funds being channeled to various ministries, departments, agencies...
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