Paul Arithi 
Dr.Kamau Thugge,CBK Governor
The Central Bank of Kenya (CBK) has clarified that its ongoing review of the risk-based credit pricing model will not lead to the re-introduction of interest rate caps, nor will it alter the existing monetary policy framework that focuses on the interbank rate.
The clarification follows public consultations on the review, where CBK received over 40 responses.
Following the recent changes announced to the framework, CBK has operationalized the narrowing of the width of the interest rate corridor around the Central Bank Rate (CBR) from ±150 basis points to ±75 basis points.
“The Central Bank of Kenya (CBK) in April 2025, issued a Consultative Paper on the Review of the Risk-Based Credit Pricing Model (the Paper). The Paper sought public views on the Review of the Risk Based Credit Pricing Model by May 2, 2025,” read part of the statement.
Additionally, CBK noted that it has adjusted the applicable interest rate on the Discount Window from the previous 300 basis points to 75 basis points, which is the upper bound of the interest rate corridor.
CBK reiterates that it will continue working with various stakeholders towards a transparent, accessible and efficient credit market.
This will spur the growth of credit to the private sector and support economic growth and the shared prosperity of Kenyans.
In regards to the proposed bank regulations in April, the CBK stated that the banking charges would be calculated according to a bank’s gross yearly earnings.
This will include profits from loans, government bonds, fees, commissions, foreign exchange dealings, and dividends.
Under the proposed new proposal, the charges must be prepaid before a licence can be issued to a bank and will have to be paid annually within 15 days of publication of audited accounts.
