Multiple bank executives have protested to the International Monetary Fund (IMF) over the Central Bank of Kenya’s (CBK) reluctance to approve lenders’ applications to raise the cost of loans following the scrapping of lending rate controls on November 7, 2019.
The IMF on Thursday revealed the lenders’ protests amid the accusation of the banking regulator capping lending rates after blocking their bid to raise the cost of loans.
The regulator had asked banks to submit new loan pricing formulas that would be the basis of setting interest rates on new credit in an environment where the government was not controlling loan costs.
Bank executives reckon that the CBK has gone silent on some of the applications and failed to approve their submissions, forcing them to continue operating as if they were still under lending rate controls to avoid falling in trouble with the regulator.
“Banks consider that approvals could be expedited,” said the IMF in reference to CBK’s delay to approve the higher lending rates.
Daily Nation Africa