Home Announcement President Uhuru assents to the bill capping lending rates by financial lending institutions

President Uhuru assents to the bill capping lending rates by financial lending institutions

• The principal objective of the bill-now law, is to provide a mechanism for regulation of banks and financial institutions’ interest rate through the introduction of ceilings
• The bill criminalizes the act of providing interest rates higher than those set by the law.
• Before giving a loan, banks are now required to disclose all the charges and terms relating to the loan.
• The maximum interest rate will be no more than 4% the base rate set and published by CBK.
• Interest granted on a deposit will be not less than 70% of the base set by CBK.
• Any bank or financial institution breaking this law will be liable to a fine of not less than 1M and/or imprisonment for a term not less than one year
• The Central Bank or the minister may publish any information they receive as long as it doesn’t disclose the financial affairs of any person, unless consented by the person in writing.
• No person should publish any information that comes into their possession in performance of his duties.
• CBK is may disclose though CRBs, any information to any monetary authority, financial regulatory authority, fiscal or tax agency, fraud investigations agency within or outside Kenya where such information is required for proper discharge of the functions
• If an Audit reveals that an institution conducts business contrary to this provisions, an institution is undercapitalized, CBK may restrict the institution from taking any corporate action.