Bank in­ter­est rates cap should re­main

Daily Nation (Kenya) - - LETTERS -

This week, Cen­tral Bank of Kenya (CBK) Gover­nor Pa­trick Njoroge said the law cap­ping bank in­ter­est rates could be re­versed soon. No ba­sis was given for this pro­nounce­ment.

How­ever, CBK has no power to re­verse the Bank­ing Act, 2016. Only Par­lia­ment can re­verse the law, while giv­ing ad­e­quate rea­sons or al­ter­na­tive mit­i­ga­tion.

There is also a sim­i­lar cam­paign by the In­ter­na­tional Mon­e­tary Fund (IMF) and the Kenya Bankers As­so­ci­a­tion to re­verse this Act. In their rush to seek a re­ver­sal of the law, both CBK and the Na­tional Trea­sury have never clar­i­fied one per­ti­nent ques­tion:

Whether the fears that ne­ces­si­tated a reg­u­lated in­ter­est rates regime have since been ad­dressed.

Con­sumers will not con­tinue to fi­nance cor­rup­tion and in­ef­fi­cien­cies within banks via in­flated in­ter­est rates.

Mean­while, we thank Deputy Pres­i­dent Wil­liam Ruto for re­peat­edly sid­ing with con­sumers and in­sist­ing that the rate caps are here to stay. We urge Par­lia­ment to un­der­take a rig­or­ous level of public par­tic­i­pa­tion and mit­i­ga­tion be­fore con­tem­plat­ing amend­ing the Bank­ing Act, 2016.

On our part, the Con­sumer Fed­er­a­tion of Kenya (Cofek) will do ev­ery­thing pos­si­ble to keep the rate caps un­til such a time that CBK and the Na­tional Trea­sury will ad­dress the non-tans­par­ent pric­ing of loans and re­duc­tion of the cost of credit in Kenya. Stephen Mu­toro, Cofek

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.