Central Bank of Kenya governor, Dr. Patrick Njoroge, at a past event. [Phot/the-star.co.ke]
Central Bank of Kenya (CBK) governor, Dr. Patrick Njoroge, has said they intend to push for the removal of the Banking Amendment Act 2016, arguing it has negative effects on the economy.
After he made these remarks on Wednesday, Members of Parliament vowed to reject the call to repeal the law capping interest rates.
Institutions need to have discipline and we need to return to market-based ways of setting interest rates,” Njoroge said.
However, these remarks were not received well by MPs from both sides of the political divide.
“We cannot allow banks to take advantage of what people want, we need to legislate this issue to have rates that are good for the people of this country, and banks must adhere to that law,” Emurua Dikir MP Johana Ngeno said as reported by the Star.
According to Kiambu MP Jude Njomo, the law was introduced to mitigate exploitation and indiscipline of banks by overcharging customers.
Njomo sponsored the legislative proposal on the interest rate cap that was contained in the Banking Amendment Bill of 2016.
The Kenya Bankers Association said the Banking Act is well intentioned but not fit for purpose.