Co-operative Bank has followed in the footsteps of KCB and CfC Stanbic Bank to lower interest rates for existing loans.
The top-tier lender which had announced rate cuts for new loans in line with the new law capping interest rates at 14.5 per cent on Friday now says the lower rate will apply to all loans.
On Thursday morning, the bank directed its credit managers to restructure repayments for old loans.
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"In order to give our existing customers the full benefit of the new law, this interest rate pricing guideline will also apply to all our existing credit facilities," Co-op Bank managing director Gideon Muriuki told managers in a circular.
"Do embark on the process of restructuring the repayment arrangements of the respective facilities in liaison with credit management division."
However, lenders are yet to give direction on interest rate paid on customer deposits which was also increased under the Banking (Amendment) Act 2015.
has said all new loans will not be charged interests of more than four per cent above the base rate set and published by CBK.
The
law
stipulates that interest on deposits be at least
70 per cent of Central Bank Rate which would come to 7.35 per cent. Most banks pay interest on customer deposits at a rate of less than five per cent.
The bank now joins the growing list of others that have aligned their charges to the law capping interest rates on loans and deposits.
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