CBK orders banks financial institutions to review listing rulesJuly 5, 2019
NAIROBI, Kenya, July 5 – Central Bank of Kenya has ordered banks to review their listing rules which will extend period for loan payment to six months,before listing in Credit Reference Bureau.
This comes after the bank regulator issued a circular highlighting that all mobile loans begin to work as normal loans where it was revealed that the Credit Reference Bureau’s paint a normal loan otherwise from mobile loans.
“Among the challenges identified by the technical working group were the difficulties in applying the current data specification template to no traditional forms of credit such as digital loans,” said CBK Director of Banking Supervision Gerald Nyaoma in the circular.
The banks, micro-finance and CRB’s are expected to start implementing the rules stipulated under the new template in the next three months.
Under the new pattern, non-performing loans are classified as per prudential guidelines which points that any loan due over 180 days will be considered doubtful.
It also requires the financial institutions to forward customers’ information to CRB’s daily to ensure the information is up to date and those who have paid their debt are not listed as defaulters.
In May the CBK monk had predicted the revision of CRB rules where he said that when one is blacklisted for too long it might have huge effects in the future where one might be required to pay more than earlier borrowed.
‘I could be blacklisted because I have not been cleared in the database but in the real sense, I have already cleared my loan this will, in turn, affect me in future,” he added.
A report by the Betting Control and Licensing Board stakeholders had also revealed that half a million Kenyans were blacklisted by the Credit Reference Bureau, where majority are young people under the age of 35 and are jobless.
The bank regulator had also mentioned it was working to instilling stiff measures that will regulate online mobile lenders.
Since then Members of the Digital Lenders Association of Kenya generated a code of conduct meant to relegate its members, who are online money lenders.