After the Central Bank of Kenya (CBK) lowered the base lending rate by 50 basis points, M-Oriental Bank announced a reduction in its interest rates by at least 0.5 per cent.
On Friday, February 7, the bank confirmed that its lending rates would drop from 16.5 per cent to 16.0 per cent. The new rates will take effect from March 1, 2025.
“Following the recent decision by Central Bank of Kenya’s Monetary Policy Committee (MPC) on 5th February 2025 to cut Central Bank Rate (CBR) from 11.25% to 10.75% reflecting the improving economic conditions and easing inflation, we wish to advise our customers that we shall adjust our base lending rate downwards from currently 16.5% per annum to 16.0% with effect from 1st March 2025,” read the notice in part.
The bank said this will apply to all existing and new Kenya Shilling denominated credit facilities.
M-Oriental Bank Reduces Interest Rates After CBK Lowers Lending Rate
Additionally, M-Oriental stated that it will continue to assess the market and advise accordingly in case of any further changes.
“We take this opportunity to thank you for choosing M-Oriental Bank Kenya as your preferred banking partner,” the statement read further.
For further enquiries, please feel free to contact your Branch, or the Bank on 0111 030 600.
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The decision comes after the Central Bank of Kenya (CBK), during its Monetary Policy Committee (MPC) meeting, cut the base lending rate by half a percentage point to 10.75 percent.
CBK Governor Kamau Thugge stated that to further support the lowering of lending rates, the committee also resolved to reduce the cash reserve requirement for banks by 100 basis points—from 4.25 percent to 3.25 percent.
“With these measures, banks are expected to take the necessary steps to lower their lending rates further, to stimulate growth in credit to the private sector, and support economic activity,” the CBK Governor said.
Governor Kamau Thugge has raised the red flag for non-compliance of banks that have failed to conform to the new rate caps.
Also Read: CBK Lowers Interest Rates on Loans Again, Puts Exploitative Banks on Notice
CBK On Fining Banks
Thugge said CBK will mete out daily fines to banks as punishment for failure to cut interest rates in the latest effort by the regulator to unlock cheaper credit for businesses.
“We have started with the onsite inspection; we have staff now working on five banks. That should be completed within the next two weeks. So far, nobody has been fined yet. We have to wait and see the results,” Thugge said.
“In the Business Laws Amendment Act enacted by Parliament, we have provided for penalties for noncompliance. The penalties have been increased from Ksh2 million to Ksh20 million.”
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