ADVOKS GLOBAL · KENYA
The Banking (Credit Reference Bureau) Regulations
72. Penalties
Edition: 2022-12-31 · In force
72. Penalties
(1)Where a Bureau—(a)is in breach of or fails to observe or adhere to the security and control measures outlined in regulation 36;(b)wrongfully alters, modifies or deletes records from its database;(c)fails to adopt security and control measures that are necessary to prevent the unauthorized access to, or wrongful use and management of information;(d)delays in providing information and documents to the Central Bank;(e)fails to comply with an order or directive of the Central Bank on data and information management;(f)discloses customer information to a person who is not authorised by these Regulations or by a customer to receive such information; or(g)breaches or fails to comply with any provision of these Regulations for which no penalty is expressly provided for,it shall be liable to pay a monetary penalty of five hundred thousand shillings and in the case of continued failure, it shall be liable for an additional penalty of ten thousand shillings for each day on which such failure continues.(2)Where an institution contravenes any of the provisions of these Regulations, the Central Bank may pursue any or all of the remedial actions provided for under the Act, the Microfinance Act (Cap. 493C), the Microfinance Act (Cap. 493C) or the Sacco Societies Act (Cap. 490B)(3)In addition to the remedial measures under paragraph (2), the Central Bank may impose the following sanctions against an institution—(a)prohibition from obtaining credit reports from Bureaus;(b)termination of employment services of an officer or employee of the institution;(c)prohibition from establishing new branches, subsidiaries, agents or introduction of new products;(d)prohibition from engaging in new activities or from expanding existing activities;(e)suspension of lending, investment, and credit granting operations;(f)prohibition from accepting further deposits or other lines of credit;(g)prohibition from declaring or paying bonuses, salary incentives, severance packages, management fees or other discretionary compensation to directors, officers or employees;(h)limit the range of activities and the locations in which such activities can be conducted;(i)prohibition from declaring or paying dividends; or(j)prohibition or suspension from any other activity that Central Bank perceives to be contributing to violation of these Regulations.(4)Where a credit information provider violates or breaches any provision of these Regulations, the Central Bank may take any of the following actions —(a)direct the bureau to which a credit information provider has submitted credit information to terminate any subsisting information sharing agreement with the credit information provider;(b)direct the bureau in possession of credit information provided by a credit information provider to delete from the database any inaccurate, erroneous or misleading information submitted by the credit information provider and to notify all subscribers who have received the inaccurate, erroneous or misleading information;(c)direct all bureaus to delete all credit information which may have been received by the bureaus from the concerned credit information provider; or(d)direct the bureau to compensate or take remedial measures in respect of any loss or damage suffered by a customer as a result of the use of any inaccurate, erroneous or misleading credit information supplied by a credit information provider.(5)In assessing the penalty to impose, the Central Bank may take into account the nature of the violation, the severity of the violation and any other relevant factor.(6)Before imposing a penalty on any bureau or an institution under these Regulations, the Central Bank shall give not less than seven days' notice, in writing, requiring the Bureau or institution to show cause as to why the penalty prescribed should not be imposed.(7)Where a monetary penalty is prescribed under these Regulations, such penalty shall —(a)be paid to the Central Bank;(b)be paid within ten days, unless otherwise specified;(c)in the first instance, be paid by the bureau;(d)where the Bureau fails to make payment, in the second instance, be paid immediately by the bank issuing the bank guarantee upon being called upon to do so by the Central Bank; and(e)where an institution fails to pay the penalty, the Central Bank may take such other action or make such decision as is permitted under the Act, the Microfinance Act (Cap. 493C) the Sacco Societies Act (Cap. 490B) or these Regulations.(8)Where no payment is made or received under paragraph (7), the licence of the Bureau may be revoked.(9)Where any provision of these Regulations imposes a penalty on any Bureau, the amount of the penalty shall constitute a debt due from the bureau to the Central Bank, and the Central Bank may —(a)in addition to the provisions of this Regulation, recover the penalty as a summary debt;(b)direct that any part of the penalty which remains unpaid after a particular period notified to the bureau and the officers concerned, shall constitute a debt payable by the bureau and the particular officers of the Bureau specified in the notification; and the Central Bank shall be entitled to recover from that bureau and officers jointly and severally.