The Court of Appeal has temporarily reinstated credit reference bureau (CRB) regulations which were nullified by the High Court last year, giving the Central Bank of Kenya the authority to regulate entities that help lenders to assess a borrower's creditworthiness.
The Banking (Credit Reference Bureau) Regulations 2020 were declared null and void by Justice Mugure Thande on August 28, 2023, for noncompliance with section 11 of the Statutory Instruments Act on timelines.
The Central Bank of Kenya (CBK) moved to the Court of Appeal contending that the entire credit information-sharing framework had been thrown into disarray as the regulator cannot enforce or implement the regulations.
The court was informed that whereas the regulations were published by CBK on April 8, 2020, they were transmitted to the Clerk of the National Assembly on May 5, 2020. The regulations ought to have been transmitted by April 14, 2020, the petitioner Benjamin Bogongo argued.
The High Court judge had rejected an excuse of Covid-19 pandemic, as submitted by CS Treasury for the cause of the delay.
A bench of three judges of the Court of Appeal agreed with CBK and Treasury that the quashing of the regulations left a huge vacuum in the regulation of CRBs in Kenya.
CBK had submitted that the absence of the regulations was hindering the discharge of its constitutional mandate, which requires it to maintain a stable and efficient banking and financial system in Kenya.
Justice Asike-Makhandia, Mumbi Ngugi and Mwaniki Gachoka ruled that the CBK and the general public would suffer irreparable harm in light of the lacuna (gap) left by the nullification and the appeal, which has already been filed, would be rendered nugatory in the event that it succeeds.
“We accordingly allow the application and grant an order that the declaration issued by the High Court... be and is hereby suspended pending the hearing and determination of the applicant’s appeal,” the judges said.
