Banker faults Treasury’s proposed financial market regulator
2 months ago, 11 July 19:00
Barclays Bank of Kenya #ticker:BBK chief executive officer Jeremy Awori has criticised the proposed Financial Markets Conduct laws saying that they amount to excessive regulation that could increase cost of services.
Mr Awori said coming up with multiple layers of regulators may not help financial markets as envisioned in the Treasury-sponsored draft Financial Markets Conduct Bill 2018, but instead create unnecessary overlaps.
“Excessive control and regulation does not help the market. This is adding a lot of bureaucracy and cost, which will find its way to the charges of products,” said Mr Awori.
He explained that that it may also be unclear and impractical to restrict the hours of banking in the market where online and mobile banking is gaining traction giving customers freedom and convenience to bank anytime on their mobile devices.
Mr Awori said as much as consumers need protection from predatory lenders, online and mobile lending may not conform to requirements such as having letters of offer.
“Though we understand the spirit of the bill, it has put in things that are challenging to execute. How do you determine banking hours for digital customers?” he posed.
Commenting on the same bill, Barclays Bank of Kenya head of strategy Moses Muthui warned that creation of overlapping regulations may encourage firms to capitalise on loopholes to circumvent unfavorable regulations.
“As the industry grows, we are likely to see a cycle of over-regulation. It may lead to regulation arbitrage like was seen in Europe leading to financial crisis,” he warned.
The proposed laws have put National Treasury and Central Bank of Kenya (CBK) at loggerheads with the latter’s boss terming them as an equivalent of being asked to trade a well-serviced SUV for a souped-up Subaru.
But Treasury Cabinest Secretary Henry Rotich said the proposed law is meant to promote a fair, non-discriminatory market place for access to credit and provide uniform practices.
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