CBK Governor Patrick Njoroge adresses a post MPC news conference on November 26, 2019 PHOTO | CITIZEN DIGITAL The sentiments on an expected hold of interest rates at prevailing rates come on the back of increased anxiety on the negative turn of interest rates following the repeal of the interest caps through the adoption of amendments to the Banking Act on November 7.
The CBK has nevertheless ruled out any pegging on new interest rates on regulations as the reserve bank seeks to fully free up the credit market even as the bank maintains the need for oversight over the lender’s own declarations to open pricing.
By so doing, the CBK has ruled out the reconstitution of holds such as the collapsed Kenya Banker’s Reference Rate (KBRR) which pegged bank interests rates on the average of the CBR and the weighted two-month moving average of the 91 day Treasury Bills rates.
The Central Bank of Kenya (CBK) has assured Kenyans to the retention of affordable loans in the post rate cap environment in its attempt to demystify pockets of uncertainty on new bank rates.
The sentiments on an expected hold of interest rates at prevailing rates come on the back of increased anxiety on the negative turn of interest rates following the repeal of the interest caps through the adoption of amendments to the Banking Act on November 7.
Speaking on Tuesday, CBK Governor Patrick Njoroge assured Kenyans of the banking sector’s move away from the exploitative charges of the past under an overhaul of pricing approaches which encompass ethics, transparency and risk based credit pricing.
“Banks will not be going back to the same old way of the past, the wild west kind of banditry. We have explained on how exactly banks need to be responsible,” he said.
In March this year, the bank implemented the Banking Sector Charter of 2018 which sort to open up the pricing of the lender’s products and services to public scrutiny.
The charter is anchored primarily on four tenets, among them credit information sharing, customer centricity and the disclosure of all credit pricing.
Commercial banks who have previously championed for the Charter have already come forward to assure clients of the large stay of old rates in the pricing of new loans as the lenders tell of the industry’s dynamism in the last three years.
“The fear that we will be unreasonable is unwarranted as we have repriced ourselves […]