Regulatory Alerts2016-09-13
Banking Circular No 4 of 2016 - The Banking Amendment Act 2016
On 13th September 2016, CBK published Banking Circular No. 4 outlining the commencement of the Banking (Amendment) Act, 2016 on 14th September. The act sets new provisions for interest rates and disclosure requirements. The Central Bank Rate (CBR) is now the base rate, which when set at four percentage points above, will determine the maximum chargeable credit facility interest rate. Interest rates are to be reported monthly, with the first returns due by 7th October for end-September data. Loan disclosure policies must be submitted to CBK by 30th September, ensuring full transparency for borrowers regarding loan terms and charges. Further reforms aimed at improving credit market operations will also be implemented by the Central Bank, which aims to improve monetary policy transmission.