https://kenyanwallstreet.com/two-submit-petition-to-senate-over-restriction-of-govt-institutions-bank-accounts-to-kcb/

Two petitioners, Sammy Muriuki and Wanja Maina want counties, state bodies, and ministries to be allowed to hold accounts with other banks besides Kenya Commercial Bank (KCB).

The petitioners also want the government to invite banks for tender pre-qualification in accordance with the Procurement and Public Disposal Act.

These are some of the recommendations the petitioners have presented to the Senate.
An Unfair Practice

The petitioners said the restriction for government bodies to bank with KCB has negatively affected counties through a monopolistic rule. They argued that KCB is not a State bank, therefore, it should not be preferred over other banks. According to them, the practice has been against a free and competitive market.

“We have made the best efforts to have these matters addressed by the relevant authorities all of which have failed to give a satisfactory response and none of the issues we have raised are pending in any court of law, Constitutional, or legal body,” said the petitioners in the petition signed July 6.

Muriuki and Wanja are also of the opinion that KCB’s outlets are not as widespread as those of other banks thereby prohibiting access to financial services by these government institutions.

In their argument, the two petitioners are appalled by the fact that the policy does not apply to other State banks such as National and Consolidated Banks.

The petitioners now want other banks such as Equity, Co-op, and Family to be allowed to compete with KCB for deposits. In their opinion, it is unreasonable to give the Treasury’s Cabinet Secretary and Principal Secretary the power to choose where government institutions can bank.

“KCB has unduly grown on the back of these Government deposits, with the State budget growing to almost Sh2 trillion, these deposits unduly favour KCB,” they asserted.

“All parties will be invited to give their views before the Senate makes recommendations or even devises rules to cure the anomaly if any,” explained Senate deputy whip Irungu Kangata adding that the examination of the petition will be impartial.

Quite clearly interest rates are not the problem. Lower interest rates and longer maturity and still defaults. Resource allocation and management is the issue. Why would you borrow to pay taxes and pensions? #

Now waiting to see if there will be an upward or downward swing in the share price.

Whoa! That is huge! Same kind of volume witnessed on BBK counter. The dividend yield on both is a bit hard to ignore. Defensive buy in my opinion.