Kenyan legislators have passed a Bill that seeks to cap bank interest rates at not more than four per cent of the Central Bank Rate (CBR) in their latest attempt to arrest the runaway cost of borrowing.

Chief executives of commercial banks and other lending institutions will face a Sh1 million fine or imprisonment for a term of not less than one year or both if convicted of flouting the law.

The Bill, sponsored by Kiambu MP Jude Njomo, also pegs the minimum interest granted on a deposit held in interest earning accounts to at least 70 per cent of the base rate set and published by CBK.

The MPs also urged President Uhuru Kenyatta Wednesday to quickly assent to the Bill in order to protect Kenyans from high interest rates.

READ: Rotich opposes MPs’ bid to cap bank lending rates

ALSO READ: New bid to cap bank interest rates fails in Parliament

WEHLIYE: Why cost of loans won’t go down even if MPs pass Bill to cap bank lending rates