Illegal and Vague
The association pointed out that the rule, that was implemented after President Uhuru Kenyatta assented the Finance Bill 2018, did not explain who the exact next of kin was.
KBA claimed that without such information, minors could be indicated as next of kin which meant that they are subjected to the detail given by the bank.
The organization sought help from the High Court and requested that the law be removed as it was illegal and there were no consultations made to the banks.
An order by KBA to the court read that, “This honourable court be pleased to issue a conservatory order staying and/or suspending the implementation of section 63 of the Finance Act, 2018 and consequently Section 33A of the Banking Act pending the hearing inter parties and determination of the petition,”
According to the association, their customers are at risk of being imposed with heavy fines.
Failure by the bank to have updated details of the next of kin would result to a Sh 1 million fine as stated by the section of the Finance Bill.
The rule however does not apply to microfinance institutions, cooperatives and saccos.
This omission is considered unfair and an act of segregation by KBA.
KBA further highlighted that the law violates their clients constitutional rights in regards to revealing of private information.