COFEK urges Uhuru to sign interest rates bill into law

August 22, 2016
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He said even if banks set aside a reserve fund of whatever magnitude the cost of the same will be passed onto borrowers in one way or the other because commercial banks are not charitable/FILE
He said even if banks set aside a reserve fund of whatever magnitude the cost of the same will be passed onto borrowers in one way or the other because commercial banks are not charitable/FILE

, NAIROBI, Kenya Aug 22- The Consumers Federation of Kenya (COFEK) is urging President Uhuru Kenyatta to sign the Banking Amendment Bill 2015 into law.

COFEK Secretary General Stephen Mutoro who spoke to the public at the Kencom Bus Stop said the government must take its rightful space on banking regulations.

“Banks cannot have discretion of choosing which laws suits them. Central Bank of Kenya has failed consumers on this front,” he said.

Mutoro says the recent collapse of several banks revealed a huge rot of insider-trading and outright theft from consumers and the fact that the affected bank directors are walking free confirms missing political goodwill to stem the rot within the banking sector.

He said even if banks set aside a reserve fund of whatever magnitude the cost of the same will be passed onto borrowers in one way or the other because commercial banks are not charitable.

“Kenya’s banking sector has demonstrated that self-regulation is impractical or has been overly abused,” he said.

Mutoro emphasised that banks are over-charging interest to cover for wastage, excessive margins and corruption.

He said if the President rejects the bill it will have handed a clear “winner-takes-it-all” to bankers at the chagrin of consumers.

He was joined by the President of the National Civil Society Congress Morris Odhiambo who said President Kenyatta should sign the bill in order to cushion Kenyans from the harsh economy.

“Poor Kenyans who take loans to sustain their businesses end up paying almost double the amount due to high rates of paying the loans and this is wrong,” he said.

Odhiambo said high interest rates result from a poorly regulated sector with bankers as kingmakers where government borrows its own funds from commercial banks at exorbitant rates.

President Kenyatta received the bill last Monday and has 14 days within which to sign or veto it.

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