The Co-operative Bank of Kenya has today announced that all their existing credit facilities will also benefit from the newly amended banking act which was passed early last week.
A memo from the Groups’ Managing Director and CEO, Dr. Gedion Muriuki to all branch managers and lending units stated that the interest rate pricing guideline will also apply to all their existing credit facilities.
“I write further to my memo dated 26th August 2016 regarding the Government’s approval of the Banking Amendment Act, wherein I guided that all new credit facilities shall be at a rate not exceeding 14.5 percent p.a,” read the memo.
Dr. Muriuki has further directed all Cooperative Bank Branch Managers and Lending Units to immediately embark on the process of restructuring the repayment arrangements of the respective facilities in liaison with Credit Management Division.
On Wednesday last week, President Uhuru Kenyatta signed into the banking interest rates Bill into law. The government approved the Act which stated that all new credit facilities will be at a rate not exceeding 14.5 percent per annum (p.a).
President Uhuru Kenyatta chose to go against the CBK and the Kenya Banker’s Association recommendation both of which institutions were against the Bill being passed. The Bill, which is now law makes it mandatory for bank interest rates to be four percent less than that set by the Central Bank of Kenya.