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Why cost of loans won’t go down even if MPs pass Bill to cap bank lending rates
Telecom operators will pay customers up to Sh30 per day for dropped calls if Parliament adopts a revived Bill that imposes a penalty for voice service outages. PHOTO | POOL
Parliament this week debated a Bill that will put a cap on bank lending rates at four per cent above the Central Bank Rate (CBR) and a floor on deposit rates at 70 per cent of the CBR.
The CBR is currently at 11.5 per cent, meaning if this Bill were to become law today, maximum lending rates would be at 15.5 per cent and the minimum banks can pay depositors will be 8.05 per cent, an interest rate spread of 7.45 per cent compared to the almost 11 per cent the banks currently enjoy.
