Banks may present convincing arguments as to why the interest rates on loans are so high in this market, but model collapses when they start trying to justify why they pay so little interest on deposits, it can't be explained away by 'risk'or 'cost'. Any new regulatory regime comes with some level of pain, I am old enough to remember the short to medium term chaos occasioned by the Michuki rules, but at the end equilibrium was attained, it will also happen in this case.

Credit cards are the Shylock's equivalent for banks. Regulating them will see even foreigners coming to apply.
I hope the insurance industry is taking notes... 'Kenyans are not happy with you'.
How I love that phrase.

Banks have been determining the default risk all along and to what cost? Money, like fuel, is a key lifeblood of any capitalist economy and when when the plumber deliberately clogs the pipes...something has to change.

For about fifteen years we have had a situation where Banks essentially abused their privileged role, to the detriment of the people and the economy. It would be a very irresponsible government that failed to act in such a situation.

Whether the action will solve the problem is another story of course. But the default setting has been changed. Banks are not a law unto themselves and their sanitized shylocking will not be permitted to stand. Now lets see them walk away from their (still very viable) money minting machines, as some people here are claiming they will do. I dare them.

default risk is an aggregate of an economies performance in perspective of a large corporate lender targeting borrowers in that economic environment.
but hiyo yote ni brarr brarrhr. the government has been busy providing security within and outside the borders to create a thriving economy, but the senzi type lazzy banks have been enjoy a free day brandishing machetes and skinning Wanjiku with passion. that's now under limits. even 14.5% is exorbitant to a stable economy of this country's status. I have never taken a loan and I will never above 10%. I can not allow a lazy fella just rob me off my efforts, benefits and ingenuity.
Although credit has been made more affordable, kbr now has become a political tool the days government will have some explanations to give to the Wanjiku.
Banks are experiencing turbulence for now and in the medium term until they restrategize. wale Wako ndani sit tight or press eject button, safe landing not guaranteed for now.

Very lucky it's a Friday...

The wounds are growing deeper. Next week blood letting more rapidly continues.

Lesson to the President.

If you must give bad news, do it on a Friday afternoon.

I agree. First he should have leaked his intention to sign the bill to test the waters, then do it on a Friday afternoon to let the news sink in through the weekend. But there would still be fire, where is Jeff with his extinguisher? Cause it is smoking hot.

Unlike locals who are more sentimental to NSE news, foreigners make decisions based on fundamentals. And as much as banking stocks are overcrowded by foreigners downward trend will continue for days! Foreigners never take chances!

I think this debate of locals and foreigners has really been overplayed! Why does anyone in this day and age think a 'local' investor is not savvy enough to make decisions based on fundamentals and not sentiment?

Show me a recent publication (O-3 years) that compared investment trends among the two groups especially the factors around their exit strategies.

I think the action of both groups are informed by fundamentals and information available.