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CBK has received 16 requests from banks to review fees after rate cap law

CBK Governor Dr. Patrick Njoroge says the banking sector remains resilient with improved performance indicators/FILE

NAIROBI, Kenya, Jul 18 – The Central Bank of Kenya has received 16 requests to increase fees by banks following the implementation of the interest rate capping in September 2016.

Central Bank of Kenya Governor Patrick Njoroge, however, says they have only approved three of the requests with the rest kept on hold.

“The three are new products which we normally review and approve after going through the process,” Dr. Njoroge said, adding that bigger banks have a dim outlook on growth prospects.

According to the Private Sector Market Perception Survey, banks expect a growth of 4.8 percent on account of weaker private sector credit growth., a depressed forecast compared to non-bank private sector o

“Non-bank private sector firms expect a stronger growth relative to the May survey, largely due to macroeconomic stability and ongoing public infrastructure development,” said Njoroge after the Monetary Policy Committee meeting, Monday, that retained the Central Bank rate at 10 percent.

The growth of credit to the private sector fell further to 2.1 percent over the 12 months to May 2017, partly due to significant repayments in manufacturing, transport and communication, and developments in the trade sector.

The Committee continues to monitor the implications of the capping of interest rates on lending and the transmission of monetary policy.

But Njoroge says the regulator is still pursuing efforts to address the factors underlying the cost of credit like information sharing and efficiency in the banking sector.

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