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Law Capping interest rates
Obi 1 Kanobi
#1 Posted : Thursday, July 28, 2016 1:58:22 PM
Rank: Elder


Joined: 7/23/2008
Posts: 2,664
If Uhuru signs this bill, I just may vote him for a second term.

Treasury and CBK are all for reduced interest rates, so why not support the process.

Market forces are not working as fast as we need them to work to manage the high interest rates regime.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
Impunity
#2 Posted : Thursday, July 28, 2016 2:13:40 PM
Rank: Elder


Joined: 3/2/2009
Posts: 24,879
Location: Masada
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.
Portfolio: KQ 6,200
You know you've made it when you get a parking space for your yatcht.

Sir invest
#3 Posted : Thursday, July 28, 2016 2:18:34 PM
Rank: New-farer


Joined: 8/19/2015
Posts: 58
He will be reluctant to sign it since he has heavily invested in the banking industry. Again Kenya Bankers Association (KBA) chief executive officer Habil Olaka, Treasury CS Rotich, and CBK Governor are not supporting this idea.
Obi 1 Kanobi
#4 Posted : Thursday, July 28, 2016 2:24:27 PM
Rank: Elder


Joined: 7/23/2008
Posts: 2,664
Sir invest wrote:
He will be reluctant to sign it since he has heavily invested in the banking industry. Again Kenya Bankers Association (KBA) chief executive officer Habil Olaka, Treasury CS Rotich, and CBK Governor are not supporting this idea.


2 faced bastards, one hand they want reduced rates for mwananchi but are unwilling to take any action to achieve the same.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
Mike Ock
#5 Posted : Thursday, July 28, 2016 2:28:30 PM
Rank: Member


Joined: 1/22/2015
Posts: 415
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests
Impunity
#6 Posted : Thursday, July 28, 2016 3:33:25 PM
Rank: Elder


Joined: 3/2/2009
Posts: 24,879
Location: Masada
Mike Ock wrote:
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests


Its becomes more messy when the Nations CEO is one of the biggest banker on the land!
The Arab spring could be the only solution left, sadly.
Portfolio: KQ 6,200
You know you've made it when you get a parking space for your yatcht.

Emerger
#7 Posted : Thursday, July 28, 2016 3:59:23 PM
Rank: New-farer


Joined: 12/1/2014
Posts: 45
Location: Nairobi
Impunity wrote:
Mike Ock wrote:
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests


Its becomes more messy when the Nations CEO is one of the biggest banker on the land!
The Arab spring could be the only solution left, sadly.


This bill may not see the light of the day. In my humble opinion i dont support the signing.

We are in a liberal market aka free economy, why then revert the gains brought about by this position of freeness.

Lowering of interest rates by banks et al cannot be emphasized more but putting a bill to do it is not the right avenue.

The CBK is already putting measures in place to ensure the CBR & KBRR rates are effectively transmitted and they have already started to do so. This is the process that needs to be enforced and strengthened.
One would wonder, how was the +4% for loans & 70% for deposits arrived at? What were the factors considered?
What stakeholders input were put in place?

Its we the consumers of credit who needs to 'force' the reduction of lending rates via the pricing information available in the various sources.

my thoughts.
obiero
#8 Posted : Thursday, July 28, 2016 4:08:09 PM
Rank: Elder


Joined: 6/23/2009
Posts: 5,306
Location: nairobi
Emerger wrote:
Impunity wrote:
Mike Ock wrote:
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests


Its becomes more messy when the Nations CEO is one of the biggest banker on the land!
The Arab spring could be the only solution left, sadly.


This bill may not see the light of the day. In my humble opinion i dont support the signing.

We are in a liberal market aka free economy, why then revert the gains brought about by this position of freeness.

Lowering of interest rates by banks et al cannot be emphasized more but putting a bill to do it is not the right avenue.

The CBK is already putting measures in place to ensure the CBR & KBRR rates are effectively transmitted and they have already started to do so. This is the process that needs to be enforced and strengthened.
One would wonder, how was the +4% for loans & 70% for deposits arrived at? What were the factors considered?
What stakeholders input were put in place?

Its we the consumers of credit who needs to 'force' the reduction of lending rates via the pricing information available in the various sources.

my thoughts.

The borrowing rates are too high and banks get way too much profit for a developing state.. The approach taken by our legislators may not be the best but its better to do something wrong fast than to do nothing right slowly

COOP 12,000; HF 5,300; KQ 139,500

Swenani
#9 Posted : Thursday, July 28, 2016 4:26:55 PM
Rank: User


Joined: 8/15/2013
Posts: 11,106
Location: Vacuum
Obi 1 Kanobi wrote:
If Uhuru signs this bill, I just may vote him for a second term.

Treasury and CBK are all for reduced interest rates, so why not support the process.

Market forces are not working as fast as we need them to work to manage the high interest rates regime.


Because it's the consumers who will suffer, the govt can reduce the interest rates without the bill, they only need to ensure they are borrowing from the banks at <5%
"If you're tired of arguing with strangers on internet, try talking to one of them in real life"-Barack Obama 10th January 2017
Ebenyo
#10 Posted : Thursday, July 28, 2016 4:32:50 PM
Rank: Member


Joined: 4/4/2016
Posts: 603
Location: Kitale
Obi 1 Kanobi wrote:
If Uhuru signs this bill, I just may vote him for a second term.

Treasury and CBK are all for reduced interest rates, so why not support the process.

Market forces are not working as fast as we need them to work to manage the high interest rates regime.


i do not support this bill.The NPLS are still too high.Reducing the rates wont help reduce npls.A defaulter is just a defaulter.
The difference between poverty and wealth is in mentality.
Obi 1 Kanobi
#11 Posted : Thursday, July 28, 2016 4:33:11 PM
Rank: Elder


Joined: 7/23/2008
Posts: 2,664
Emerger wrote:
Impunity wrote:
Mike Ock wrote:
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests


Its becomes more messy when the Nations CEO is one of the biggest banker on the land!
The Arab spring could be the only solution left, sadly.


This bill may not see the light of the day. In my humble opinion i dont support the signing.

We are in a liberal market aka free economy, why then revert the gains brought about by this position of freeness.

Lowering of interest rates by banks et al cannot be emphasized more but putting a bill to do it is not the right avenue.

The CBK is already putting measures in place to ensure the CBR & KBRR rates are effectively transmitted and they have already started to do so. This is the process that needs to be enforced and strengthened.
One would wonder, how was the +4% for loans & 70% for deposits arrived at? What were the factors considered?
What stakeholders input were put in place?

Its we the consumers of credit who needs to 'force' the reduction of lending rates via the pricing information available in the various sources.

my thoughts.


Free market economics include macroeconomic interventions by govt through measures that include legislation otherwise anyone would start a bank etc. besides, whats the difference between capping the rates and the already existing banking regulations that determine minimum capital, liquidity ratios, concentration ratios etc. they are all regulations of one sought or another.

In other industries, fuel prices have been capped, and I am yet to see any energy company folding up and quitting Kenya.

All we are asking for is that the president passes one law that protects the consumer of banking services instead of the bank owners.

The recent Japan report on sustainable growth in this country should be telling on the need for a paradigm shift on how we as a country interpret capitalism. It shouldn't be a free for all
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
Obi 1 Kanobi
#12 Posted : Thursday, July 28, 2016 4:38:42 PM
Rank: Elder


Joined: 7/23/2008
Posts: 2,664
Swenani wrote:
Obi 1 Kanobi wrote:
If Uhuru signs this bill, I just may vote him for a second term.

Treasury and CBK are all for reduced interest rates, so why not support the process.

Market forces are not working as fast as we need them to work to manage the high interest rates regime.


Because it's the consumers who will suffer, the govt can reduce the interest rates without the bill, they only need to ensure they are borrowing from the banks at <5%

The govt can't reduce the interest rates, if they could, they would as nobody wants to pay more for anything.

Then there would be no need for parliament to step in through legislation

Our problem is that we lack sufficient capital to go around, because capital is limited, the govt needs to step in to ensure there is some sanity in accessing it, right now what we have is similar to hoarding and cartel-like behavior by the banks
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
enyands
#13 Posted : Thursday, July 28, 2016 4:43:55 PM
Rank: Elder


Joined: 12/25/2014
Posts: 2,218
Location: kenya
Let me tell you how kenyan parliament works, most of this mpigs aren't coming back. They have huge loans that they are servicing at high rate but they can do it for now because they security of tenure. Let's get that first. So when out in the cold do you think they want to pay 25m loan at 22%,no .the motto is "let's adjust it when our term is almost over so that we don't suffer." Is a selfish game but that's kenya
Obi 1 Kanobi
#14 Posted : Thursday, July 28, 2016 4:49:07 PM
Rank: Elder


Joined: 7/23/2008
Posts: 2,664
enyands wrote:
Let me tell you how kenyan parliament works, most of this mpigs aren't coming back. They have huge loans that they are servicing at high rate but they can do it for now because they security of tenure. Let's get that first. So when out in the cold do you think they want to pay 25m loan at 22%,no .the motto is "let's adjust it when our term is almost over so that we don't suffer." Is a selfish game but that's kenya


The motive is irrelevant, whats important is the results of their action, does it benefit the wider kenyan? Yes or No!
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
enyands
#15 Posted : Thursday, July 28, 2016 4:54:46 PM
Rank: Elder


Joined: 12/25/2014
Posts: 2,218
Location: kenya
Obi 1 Kanobi wrote:
enyands wrote:
Let me tell you how kenyan parliament works, most of this mpigs aren't coming back. They have huge loans that they are servicing at high rate but they can do it for now because they security of tenure. Let's get that first. So when out in the cold do you think they want to pay 25m loan at 22%,no .the motto is "let's adjust it when our term is almost over so that we don't suffer." Is a selfish game but that's kenya


The motive is irrelevant, whats important is the results of their action, does it benefit the wider kenyan? Yes or No!


Obi you these people don't give a crap how kenyans feel on anything...Joe donde had a very huge loan and he was struggling to pay it that finally he defaulted that's why he launched that bill long time ago. It's irrelevant now but try see the source and you will understand why they always try bring it that last year before elections
Emerger
#16 Posted : Thursday, July 28, 2016 5:24:36 PM
Rank: New-farer


Joined: 12/1/2014
Posts: 45
Location: Nairobi
Obi 1 Kanobi wrote:
Emerger wrote:
Impunity wrote:
Mike Ock wrote:
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests


Its becomes more messy when the Nations CEO is one of the biggest banker on the land!
The Arab spring could be the only solution left, sadly.


This bill may not see the light of the day. In my humble opinion i dont support the signing.

We are in a liberal market aka free economy, why then revert the gains brought about by this position of freeness.

Lowering of interest rates by banks et al cannot be emphasized more but putting a bill to do it is not the right avenue.

The CBK is already putting measures in place to ensure the CBR & KBRR rates are effectively transmitted and they have already started to do so. This is the process that needs to be enforced and strengthened.
One would wonder, how was the +4% for loans & 70% for deposits arrived at? What were the factors considered?
What stakeholders input were put in place?

Its we the consumers of credit who needs to 'force' the reduction of lending rates via the pricing information available in the various sources.

my thoughts.


Free market economics include macroeconomic interventions by govt through measures that include legislation otherwise anyone would start a bank etc. besides, whats the difference between capping the rates and the already existing banking regulations that determine minimum capital, liquidity ratios, concentration ratios etc. they are all regulations of one sought or another.

In other industries, fuel prices have been capped, and I am yet to see any energy company folding up and quitting Kenya.

All we are asking for is that the president passes one law that protects the consumer of banking services instead of the bank owners.

The recent Japan report on sustainable growth in this country should be telling on the need for a paradigm shift on how we as a country interpret capitalism. It shouldn't be a free for all


Well put Sir.
We only differ in the how not on the what. The what is agreeable and welcomed by all.
However, the how is the issue here.
You do not put a law to be enforced and at the same time have a regulator put regulations to regulate. The law should be to empower the regulator. The ratios among others are regulatory checks to ensure the free economy is effective and not open to abuse.
Putting caps on interest rates beats one of the key mission/objective of the regulator being formulation & implementation of the monetory policies. Its the effectiveness on transmission of the monetary policies that needs a review not a bill to shortchange the part role of the MPC.
A law should protect all not part.
The japan opinion in my view is more of a fiscal aspect rather than a monetary aspect but needless to say an effective economy policy relies on both.
MaichBlack
#17 Posted : Thursday, July 28, 2016 5:26:31 PM
Rank: Elder


Joined: 7/22/2009
Posts: 7,109
President Uhuru is not going to sign that bill!!!
Any finance/economics guy will tell it would be a tragedy to individual loan seekers and SMEs.
Interest rates among other things depend on the risk profile of the client. If the rate is capped, the banks would focus on the least risky customers first - the government and blue chip companies. SMEs and individuals would follow if there is money left.
And why would I want to lend to 10,000 entities Kshs. 100,000/= each while there is a single entity (with a better risk profile) that is willing to take the entire billion???
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
MaichBlack
#18 Posted : Thursday, July 28, 2016 5:39:27 PM
Rank: Elder


Joined: 7/22/2009
Posts: 7,109
Impunity wrote:
Mike Ock wrote:
Impunity wrote:
The Banking cartles and CBK have ganged up against the biol, very sad day.
Where in the world do commercial banks makes 30 billion profits and pay 1.5% pa interest on deposits?
Its only invetsment banks which can make such weird profits since most of them are actually pyranid schemes and cons...they quicly derate a country from AA+ to say C in a midnight then go behind door and buy the falling goverment papers in that same country, then after a year or two, they would elevate the country from C to A+, sell the papers and go home laughing.

For commercial banks like KCB and Equity, this is not their core buisness, so how how they manage those billion-profits is a mystery.

Unfortunately that is a defining characteristic of 3rd world countries: government is held hostage by private business interests


Its becomes more messy when the Nations CEO is one of the biggest banker on the land!
The Arab spring could be the only solution left, sadly.

You guys have such a crazy sense of entitlement!!!

Nobody owes you a loan!!! Nobody forces you to take a loan!! You take yourself to the bank, fill in forms and get the loan knowing the rates.

Nobody forces you to keep your money in the bank!! Take your money wherever you want - Sacco, Stocks, T Bills, Invest bla bla bla. Don't start crying like the only place you can put your money is in a bank!

Please Note: It is true banks pay low interest rates on deposits and charge high interest on loans. But it is a free market. You don't have to keep your money there or borrow from there. People in Chamas and Saccos know this!! Vote with your legs. Otherwise soon you will be demanding for legislation to reduce accommodation and food prices at Kempiski!!!

Harsh but true!!!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
MaichBlack
#19 Posted : Thursday, July 28, 2016 5:44:20 PM
Rank: Elder


Joined: 7/22/2009
Posts: 7,109
enyands wrote:
Let me tell you how kenyan parliament works, most of this mpigs aren't coming back. They have huge loans that they are servicing at high rate but they can do it for now because they security of tenure. Let's get that first. So when out in the cold do you think they want to pay 25m loan at 22%,no .the motto is "let's adjust it when our term is almost over so that we don't suffer." Is a selfish game but that's kenya

Very true!!!

These fellows don't care about you and I. There have loans right, left and center. Just watch a random news broadcast or read a news paper and you will see yet another one being sued or auctioned due to unpaid debts. And the imagine they can legislate themselves out of debt! Nonsense!!!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
josimar
#20 Posted : Thursday, July 28, 2016 5:45:24 PM
Rank: Member


Joined: 7/6/2010
Posts: 237
In developed economies such as Japan , mortgage rates are offered at 1% and tenor is 30 Years .
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