The Central Bank of Kenya (CBK) has poured cold water on a proposal by commercial banks to use the interbank rate as a reference rate for determining the pricing of consumers' loans, saying it will not accurately reflect their true cost of funding.
A consultative paper published by the CBK on Tuesday on the planned review of the present risk-based pricing model, has highlighted the different views between the CBK and banks, in determining the base rate of loans as the risk-based pricing model is ushered out on account of inefficiency and lack of transparency.
