Presidential assent to the Interest Rate Bill signifies failure of the regulator-CBK

President Kenyatta’s final assent to the interest cap bill into law is a clear indication of the perpetual failure of the regulatory authority to monitor and control the commercial banks. The CBK has all the regulatory tools at its disposal to ensure commercial banks operate within the acceptable limits that do not exploit borrowers to the extent of making them poorer. May be there are also bandits and cartels in the banking industry as once stated by the immediate former Chief Justice.

Kenyans must remember that on November 12, 2015 the CBK governor ordered banks to reduce lending rates to no avail. Instead, the commercial banks increased their lending rates by mid-December 2015. So what is the role of the regulator? Why do we even have the regulator? Why has the regulator abdicated its responsibility of monitoring and regulating the operation of commercial banks?