Regulatory Alerts2015-01-15
Banking Circular No 6 of 2014 - Integration of the National Bank of Rwanda into the East African Payment System (EAPS)
The Kenya Banks' Reference Rate (KBRR) was introduced in 2014 to enhance credit pricing transparency and improve the transmission of monetary policy signals into changes in banks' lending rates. After a January 2015 meeting, where the CBR remained at 8.50%, the CBK revised the KBRR from 9.13% to 8.54%. Starting from this date and until its next review, all microfinance banks will use the new KBRR rate as their base for pricing flexible-rate loans. The interest rates charged by individual banks should be as close as possible to this KBRR. Banks will disclose to borrowers and CBK any deviation from the KBRR. By 30 June 2015, existing flexible/variable credit facilities must transition to the new framework. The Central Bank of Kenya (CBK) will continue working with stakeholders towards a smooth implementation of the framework and its dissemination to the public.