The Cooperative Bank of Kenya has set a good example to other commercial banks by has announcing compliance with Banking Act Amendment.
“In the foregoing and for business continuity, we advise that pending receipt of full guidelines from our regulator the central bank of Kenya particularly on the applicable base rate, all new credit facilities shall be at a rate not exceeding 14.5% p.a.” Mr Muriuki said in a statement.
The bank announced that it will start offering new credit at a rate of 14.5 per cent annually, becoming the first financial institution to announce compliance with the new Banking Act Amendment, capping interest rates on loans.
“Cooperative Bank will now offer all new credit facilities at a rate not exceeding 14.5 per cent per annum.” The Group Managing Director Gideon Muriuki said on Friday in a statement.
The came barely two days after President Uhuru Kenyatta signed into law, the amendment paving way for cheaper credit from the banks which have been prohibitive.
Muriuki added that the Banking Act sets the maximum interest rate chargeable for credit facility at 4 per cent above the Base Rate published by the Central Bank of Kenya.
The act provides that a person shall not enter into a new arrangement that exceeds the prescribed rate.
Opposition leader Raila Odinga congratulated President Uhuru for assenting to the law,