Kenyan banks lose liberty to raise loan rates at their free will
The Central Bank of Kenya wants every bank to review its loan pricing criteria by considering their relevance in the current economic environment. PHOTO | FILE
The Central Bank of Kenya has introduced tough conditions for setting lending rates, dimming banks hopes of raising interest rates at will after the repeal of the contentious interest rate law in November last year, which had capped lending rates at four percentage points above the prevailing Central Bank Rate (CBR).
The EastAfrican has learnt that while banks have been demanding the freedom to price loans based on the risk profiles of individual customers, CBK is not comfortable with the cost and profit margins banks are factoring into the overall price of loans.
