Nairobi High Court has on Thursday declared the Banking Amendments Act 2016 on capping interest rates as unconstitutional in favor of banks.
The current interest rate which was capped at 4% above the Central Bank interest rate of 9% was challenged by Boniface Oduor a Nairobi resident.
Passing judgment on the petition, a three bench judge ruled the current provisions in section 33B of the Banking act as ambiguous, imprecise and indefinite therefore being null and void.
Following the decision, it will be impossible to revert the interest rates by 12 months following existing contracts between the banks and customers at the prevailing interest rate.
In June 2016 the National Assembly passed the interest rate Bill into an Act which was later signed into law in September the same year by President Uhuru Kenyatta.
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