Kenya Commercial Bank (KCB) has become the second bank to comply with the new law capping interest rates signed last week by President Uhuru Kenyatta.
On Monday, through a short message text, the lender informed its clients of their compliance with the Banking (Amendment) Act which has set the maximum interest rate chargeable for any loan at four per cent above the Central Bank Rate announced by the regulator, CBK.
“In compliance with Banking (Amendment) Act all new loans are capped at 14.5 per cent effective Monday. Guidance on existing loans awaits direction from CBK," read the short text.
The announcement comes even as investors continue to withdraw their shares from banks listed on the Nairobi Securities Exchange.
Banks, through the Kenya Bankers Association, on Thursday said that they will wait for guidelines from the regulator to comply with new law.
The new law caps interest at four percentage points above the base rate to be determined by the Central Bank. The amended Banking Act also requires banks to pay a minimum of 70 per cent of the base rate on fixed-term deposits.