The Cooperative Bank has reduced its loan interest to 14.5 per cent annually.
The directive was issued Friday the 26 August by the bank's top administration.
The bank, which has a total number of about 3.5 million accounts, has taken the move just several days after the president signed the interest capping Bill into law and is the first one to do so with the others yet to follow suit.
According to the institution's Chief Executive Officer Gideon Muriuki, they have taken the step as a way of complying with the law.
However, this was unexpected to many as it comes at a time when the Kenya Bankers Association under its C.E.O Habil Olaka has come out to say that the law cannot be followed with immediate effect, but can only take root two weeks after being signed into law.
The president signed the bill following complaints from the citizens who were suffering under the burden of high loan rates and interventions from leaders including the opposition chief and parliamentarians.