Audio By Carbonatix
A Kenyan court ruled on Thursday that a cap on commercial bank interest rates is unconstitutional, but judges suspended the ruling for 12 months to allow parliament to re-examine the law.
Lawmakers capped interest rates at 4 percentage points above the central bank’s benchmark in 2016, saying they were concerned about high levels. But that has led to a private credit squeeze, as banks say it forced them to cut back on loans to high-risk groups.
The ruling said the section of the banking act imposing the cap was unconstitutional because it only punished bankers and not customers for contravening the law.
However, the ruling does not mean the rate cap will be lifted immediately. “Implementation is suspended for 12 months,” the central bank said in a tweet.
In March 2018, the central bank said the cap had probably cut 2017’s estimated economic growth rate by 0.4 percent because it throttled credit to small and medium businesses.
In June, Finance Minister Henry Rotich proposed repealing the interest rate cap, a move cheered by bankers.
But lawmakers rejected that.
Latest Stories
-
At least 39 dead, 152 injured in high-speed train collision in southern Spain
29 seconds -
Video: Galamsey and the Bui Power Plant; illegal mining threatens dam’s future
2 minutes -
GNFS intensifies fire safety education and inspections across Greater Accra
4 minutes -
DRIP formalised nationwide to ensure efficiency and sustainability – Vanderpuye
5 minutes -
Mahama’s economic gains favour the rich, not ordinary Ghanaians – Dennis Miracles Aboagye
11 minutes -
WPL 2025/26: Ampem Darkoa Ladies stretch gap in Northern Zone after latest win
11 minutes -
Dr Godwin Djokoto calls for reorientation of public land ownership
12 minutes -
Blackstar Experience had no budget for 2025 – Rex Omar
16 minutes -
Coconut Grove Regency Hotel celebrates staff excellence at Annual Awards Dinner
18 minutes -
Coconut Grove Regency Hotel honours staff for dedication and professionalism
29 minutes -
NPP presidential aspirants to sign peace pact ahead of flagbearer race
33 minutes -
WPL 2025/26: Army Ladies, Jonina Ladies falter as Hasaacas Ladies beat Oak Ladies
34 minutes -
DRIP not only for rural roads; urban areas are major beneficiaries – Vanderpuye
35 minutes -
AFCON 2025: CAF condemns chaotic final scenes
37 minutes -
‘Europe won’t be blackmailed,’ Danish PM says in wake of Trump Greenland threats
41 minutes
