Members of Parliament have objected the push by banks to scrap lending rate caps.

Do you have a lead on a newsworthy story? Share news tips with us here at Hivisasa!

A parliamentary committee on Wednesday insisted that the commercial banks’ lending rates must remain in place. The Finance and National Planning Committee is now pushing for the rewriting of the laws to make them clearer.

The Ministry of Finance had recommended for the capping in its 2019/20 (July-June) fiscal budget. 

Politicians have raised concern over the increased rates offered by the commercial banks across the country. 

The High Court had ruled that the limit on interest rates charged by the financial institution is unconstitutional.

In March, the court ruled that the appropriate measures should be put in place to ensure Kenyans are not subjected to unrealistic terms as far as lending is concerned. 

A petitioner, Boniface Oduor, had questioned the provisions of the banking amendment act, 25 in 2016. 

According to the petitioner, the court cannot fault parliamentarians in the fight to limit the interest rates. 

“For that reason, the court cannot fault the National Assembly in legislating a provision on interest rate ceiling. In arriving at the decision, the court gives deference to the principle of the presumption of constitutionality of legislation,” reads part of the petition. 

The introduction of the limit to the interest rates has elicited mixed reactions from different stakeholders in the banking sector.