| Proposed Provision for Amendment | Proposed Amendment | Our Comments |
| Section 28 (1) of the KDI Act, 2012 | Deletion & Substitution: The Bill proposes to amend by deleting the subsection providing for “one hundred thousand shillings” as amended vide Gazette Notice No. 159 of 2020 to “five hundred thousand shillings” and substituting it with “Kenya shillings one million” | If passed, the amendment cushions depositors by increasing the maximum payable coverage limit to KES 1 Million instead of KES 100,000 or KES 500,000 (as recently amended) to avoid exposing the depositors to the risk of loss in the event the bank is under liquidation. This would boost the confidence of the investors and depositors in banking institutions and spur a greater saving culture among Kenyans. |
| Section 28 (2) of the KDI Act, 2012 And Section 33(6) | Deletion & Substitution: The Bill seeks to scrap the requirement for the KDIC to consolidate all the accounts of a depositor before KDIC can pay the maximum coverage limit. The Bill equally proposes to amend section 33(6) of the Act by expanding the time for making payments for claims within one (1) month to six (6) months or any lesser time. | This would allow depositors holding more than one account with a Bank to claim maximum coverage for the two or more accounts, unlike the current provision, where depositors are entitled to be paid the maximum coverage limit for consolidated accounts held by an individual in one bank. Under the International Association of Deposit Insurers (IADI) Principles of Effective Deposit Insurance Systems, the maximum payable guarantee for depositors is capped per depositor as opposed to per account that a depositor holds with the bank. Whereas preventing KDIC from consolidating the accounts of a depositor would be advantageous to the depositor, the same would go against the IADI Principles of Effective Deposit Insurance Systems. |
| Section 28 (2) of the KDI Act, 2012 | Insertion: The Bill proposes to introduce a penalty for failure of the KDIC and its officers to comply with the six (6) months’ timelines within which to pay the claims as provided under the Act. | The introduction of a penalty for non-compliance is meant to compel prompt payment by KDIC to depositors within the stipulated time once claims are lodged. |