This archive report was first published on 25 July 2019.
On July 25, 2019, Kiambu MP Jude Njomo proposed The Banking Amendment Bill of 2019, which aims to punish borrowers who take on loans beyond the set lending rate.
The Central Bank Base Rate, as per the September 2016 Banking Amendment Act, stands at 9 percent, with banks allowed to exercise a 4-point limit above the base rate.
The proposed bill seeks to address loopholes in the Banking Amendment Act of 2016, including vague definitions of critical terms like 'credit facility' and 'Central Bank Rate', which have led to misinterpretations and misuse.
According to the bill, borrowers who pay interest beyond the capped rate will be liable to a fine of Shs. 1 Million or one-year imprisonment upon conviction.
Currently, the law only punishes banks and CEOs, a move that Hon. Njomo believes is discriminatory.
