Interest Rate Cap declared Unconstitutional
On the 14th March 2019, the Commercial Division of the High court declared the above Section 33B(1) and 33B(2) of the Banking Act (Cap. 488) which caps interest rates for banks and financial institutions unconstitutional, null and void for being vague, ambiguous, imprecise and indefinite.
HOWEVER, the court suspended the above declaration that Section 33B is unconstitutional for a period of twelve (12) months from the date of delivery of the judgment for the National Assembly to consider making appropriate amendments to the impugned sections.
The court went on further to order that should the National Assembly not amend the impugned sections within 12 months, the declaration of invalidity of the sections (interest cap) shall take effect.
Finally, the court also found Section 33B (3) of the Banking Act unconstitutional, null and void for being discriminatory contrary to Articles 27 and 29 of the Constitution and infringement of fair hearing under Article 50 of the Constitution because anyone who does not comply with Section 33B should be subjected to the same treatment in regards to penalty. The Section as is only punishes the bank, financial institution and their respective CEOs for contravention and not the other persons who have entered into these agreements (customers).
The case citation is Petition Number 413 Of 2016: Boniface Oduor Vs. The Attorney General & 4 Others.