The Central Bank of Kenya has disputed reports that it plans to return to the era of interest rate caps amid concerns over the delay from banks to lower lending rates when the apex bank lowers its central bank rate. The concerns emerged after CBK published a Consultative Paper on the Review of the Risk-Based Credit Pricing Model in April, inviting views from the public on a raft of changes.
But the paper, which now enters the review stage, was misunderstood, according to the banking regulator.
According to CBK, the consultative paper prompted a response from different stakeholders, including banks, companies and some financial experts.
The concerns raised include the understanding that CBK is seeking a return to interest rate caps, that was first introduced in 2016 and repealed in 2019.
