The Central Bank of Kenya will be introducing a new tool that will allow banks to instantly receive any changes on the lending rates while revealing that three banks remain behind in meeting the demands for core capital.
According to CBK Governor Kamau Thugge, the apex bank is implementing a series of changes to seal loopholes that cause delays in Kenyans accessing cheaper loans.
Thugge revealed that the CBK is planning to introduce new methods for determining the Central Bank Rate, which is the interest rate at which the CBK lends to commercial banks.
He noted that efforts are underway to either introduce a new system for setting the rate or amend the existing method, with a proposal expected to be submitted for approval within two weeks.
As per Thugge, CBK will ensure that the lending rates are reflected immediately on the side of the banks to ensure Kenyans are able to access loans at favourable rates almost instantly.
The issue of banks retaining lending rates stubbornly high despite CBK lowering its rate twice in a row rocked the country after the CBK reduced the CBR by 50 basis points to 10.75 per cent. Afterwards, banks took their time to lower rates, which had many, including Members of Parliament, up in arms.
