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CBK Introduces Tough Rules on Banks to Tame Dollar Crisis

23Mar

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CBK Introduces Tough Rules on Banks to Tame Dollar Crisis

The Central Bank of Kenya (CBK) on Wednesday, March 22, introduced six new guidelines to commercial banks in a bid to ease the country's current dollar shortage In a statement, the CBK published Kenya Foreign Exchange Code (the FX Code), the guidelines were aimed at improving transparency in the foreign currency market According to the regulator, the guidelines would guarantee ethical and clear transactions to curb the relentless biting shortage. It will facilitate better functioning of the market, further reinforcing Kenya’s flexible exchange rate regime. The FX Code is intended to promote a robust, fair, liquid, open, and appropriately transparent market,” the statement read in part. CBK instructed commercial banks to monitor all forex transactions and file compli...

CBK Reintroduces Charges Between Mobile money to Bank Transfer that were waived in 2020.

The Central Bank of Kenya (CBK) has reintroduced charges on transactions between mobile money wallets and bank accounts which had been waived on March 16 2020. The charges are set to be restored from January 1, 2023, and follow discussions and lobbying between the CBK, banks and payment service providers with the latter two groups pushing for the fees return. The payment service providers (PSPs) and banks have nevertheless agreed to revise the maximum charges on the transactions following consultations with the CBK. The revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by an average of 61 per cent while the inverse (mobile wallets to bank accounts) charges will fall by an average of 47 per cent. Tariffs for paybills used t...

CBK Directs Banks To Forgive Ksh.15 Billion Defaulted Digital Loans

The Central Bank of Kenya (CBK) has directed banks to write off at least Ksh.15 billion worth of digital loans which currently stand in default status as part of a credit repair framework. The banking sector regulator has asked lenders including microfinance banks and mortgage finance companies to provide a discount of at least 50 per cent of the non-performing mobile-phone digital loans outstanding as of the end of October 2022. Borrowers covered in the write-offs will have their credit standing upgraded to performing from non-performing. “The institution will then enter into a repayment plan with the borrowers for a period up to May 1, 2023, for the balance of the loan. Upon expiry of the framework, the credit standing of the borrowers with respect to these loans will depen...