Co-op Bank undercuts its peers, complies with new Banking Act
Cooperative Bank on Friday complied with the newly signed Banking (Amendment) Bill, informing all its branches and lending units not to exceed interest rate at 14.5 per cent.
In a memo signed by the group managing director and CEO Gideon Muriuki, the bank’s staffers were informed that the new rates shall take effect for all new credit facilities pending full guidelines by Central Bank of Kenya.
“In the foregoing and for business continuity, we advise that pending receipt of full guidelines from our regulator the Central Bank of Kenya particularly on the applicable base rate, all new credit facilities shall be at a rate not exceeding 14.5% p.a (being the current Central Bank Rate of 10.5% p.a. +4%),” read the memo in part.
The Kenya Bankers Association on Thursday said it is awaiting rules from the State to establish whether those already with loans will be affected by the new interest cap law.
This even as the banking stock prices fell for the second day running on Friday morning led by the largest three banks including Equity Bank losing 9.92 per cent, Cooperative bank 9.62 per cent, and KCB 10.00 per cent.
By 11.30 AM, NIC bank had also lost 9.43 per cent, Housing Finance 9.71 per cent, Standard Chartered 6.86 per cent and I&M had shed off 9.84 per cent with Barclays losing 8.75 per cent.
KCB was selling at Sh27, Equity Bank at Sh29.50, Coop at Sh10.80, NIC at Sh24, StanChart at Sh190, I&M at Sh87 and Housing Finance at Sh13.95 as at 11.30 AM.