Co-operative Bank on Friday became the first lender to direct its managers to comply with the new interest capping law .
The decision was taken even as banking stocks continued to fall by big margins for the second day running.
Managing director Gideon Muriuki said the second-largest lender by assets will apply the 10.5 per cent Central Bank Rate as base rate, pending issuance of guidelines by the Central Bank of Kenya.
“We advise that pending receipt of full guidelines from our regulator, the Central Bank of Kenya, particularly on the applicable rate, all new credit facilities shall be at a rate not exceeding 14.5 per cent,” Muriuki said in a memo to branch managers on Friday.
The base rate of loans to customers is KBRR (8.9%) while loans to other banks use CBR (10.5%). Therefore COOP and others who will follow waache ujanja and have the loan priced at a maximum of 12.9%
Hiyo ni MD alitoa statement, pitia pale dept inaitwa Credit management upatane na akina Mburu. Utashangaaa!!! You are all peasants kama huna kabloti!!!