Cash ratio increase mops up Sh7.5bn from banks
14 December 2011, 09:20
Commercial banks will cede up to Sh7.5 billion to the Central
Bank of Kenya (CBK) beginning Thursday following an increase in the cash
reserve ratio requirement by a half percentage point.
This is expected to tighten availability of cash in
the banking system, exerting pressure on the growth of the financiers’
loan books and on the lending rates to borrowers.
The cash reserve ratio (CRR) is a proportion of
customer deposits that lenders are supposed to cede to the regulator as a
buffer for ensuring that banks have money to meet their clients’
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