What borrowers need to know as CBK penalises 33 Kenyan banks over loan interest rates
Kenyan borrowers face fresh questions about how banks set loan interest rates after the Central Bank of Kenya (CBK) penalised 33 commercial banks following inspections that found widespread breaches of banking regulations. CBK said most of the violations identified during its review were linked to the implementation of the Risk-Based Credit Pricing Model (RBCPM), the […]
Kenyan banks face penalties for loan interest rate violations, prompting borrowers to understand the pricing structure. The Central Bank of Kenya (CBK) inspected 38 commercial banks, penalising 33 for breaches of banking regulations, including the Risk-Based Credit Pricing Model (RBCPM). The framework governs variable-rate credit pricing, linking the interest rate to the bank's costs and the borrower's risk profile.
CBK found most violations related to non-compliance with RBCPM, breach of single obligor limit, and violation of capital requirements. Banks must publish weighted average lending rates, premiums, and fees for loans. Borrowers should inquire about interest rate calculation, reference rate, bank-specific premium, and additional fees.
Written by urgent.news from People Daily Kenya's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
