The Co-operative Bank of Kenya has become the first lender to cut down its lending rate from 14 percent to 13.5 percent following the decision by the Central Bank of Kenya to cut the benchmark by 0.5 percent.
The lender has disclosed that interest on existing customer deposits will also be immediately payable at the new rate of 6.65 percent, down from 7 percent adding that existing loans will move to the new rate within the 30-day period allowed by consumer protection laws.
Currently, any new loans at Co-op Bank are being taken at a discounted rate of 13.5 percent.
The new rates will not only be applied to new loans but also old loans will be reviewed and the new rate applied, meaning that all customers will benefit from the move.
Co-op Bank said interest on existing customer deposits will also be immediately payable at the new rate of 6.65 percent, down from seven percent.
The Monetary Policy Committee (MPC) applauded the CBK’s directive stating that the decision to fix the benchmark rate at 9.5 percent was informed by the need to support economic activity in the changing business environment.
This is not the first time Co-op bank is becoming the first in complying with a directive. When the new interest rate cap became law, the lender was again the first one to comply with the new law in cutting down its lending rates.