The National Assembly has said the Central Bank of Kenya (CBK) does not have powers to approve the opening, relocation and closure of any branch of a mortgage refinance company.
Parliament nullified sections 26(2) and 42 of the Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019.
The Central bank of Kenya published the draft regulations in May this year to govern the establishment of Mortgage Refinance Companies (MRCs).
The annulled regulations had given CBK unlimited control over the licensing and regulation of mortgage refinance companies.
“The bank may provide in guidelines other forms and the manner in which a place of business may be opened, relocated or closed,” the annulled section reads.
The committee on Delegated Legislation argued sections 26(2) and 42 of the regulations contravened section 13(m) of the Statutory Instruments Act as they inappropriately delegate legislative powers to the Central Bank of Kenya to issue guidelines. It approved adoption of the regulations subject to deletion of the two sections.
“Guidelines are statutory instruments within the meaning of Section 2 of the Statutory Instruments Act and if made by CBK, must be submitted to the National for Approval,” said Gladys Shollei, chairs of the committee, in a report adopted by the parliament before MPs went on recess.