The Co-operative Bank of Kenya on Wednesday clearly made a major announcement that will see customers with pre-existing loans enjoy maximum benefits of the recently approved Banking (Amendment) Bill 2015.
In a statement, Co-op bank noted that it had reduced interest rates on the already acquired loans to 14.5 percent according to the new law.
Co-op Group Managing Director and CEO Gideon Muriuki directed all managers and lending units to commence the process of restructuring the repayments in accordance with the new lending rates.
The bank was the first financial institution to welcome the new law after President Uhuru Kenyatta approved the bill last week.
Following the President’s assent, the law will see commercial banks cap interest rates at not more than 4 percent of the rate provided by the Central Bank of Kenya (CBK).
The bill had sparked a lot of controversy with the Kenya Bankers Association (KBA), the umbrella body of commercial banks in the country, urging the President to reject the bill.
KBA dismissed the bill noting that the rates could be lowered without the need for legislation.
In his statement, Mr Kenyatta said: “I have consulted widely and it is clear to me from those consultations that Kenyans are disappointed and frustrated with the lack of sensitivity by the financial sector, particularly banks. These frustrations are centred around the cost of credit and the applicable interest rates on their hard–earned deposits. I share these concerns”.
