KCB Bank has announced that it will be reducing its base lending rate effective in the new year. In a public statement via the Group's twitter page, the bank says it will reduce the rate by 200 basis points to 17% down from the current 19%. This announcement has comes a month after the Central Bank of Kenya reduced the Central Bank Rate (CBR) by 200 basis points to 11% from 13%.

The groups mortgage division S&L Mortgages will also drop lending rates by the same margin to 16% from 18%. The group will effect the new rates on 1st January 2013.

The Central Bank of Kenya's Monetary Policy Committee (MPC) reduced the CBR to 11% citing the tighter monetary policy stance had continued to deliver the desired results of a decline in inflation and exchange rate stability. The rate cut was welcome news for borrowers as banks are expected to lower interest rates they charge on loans since commercial banks peg their lending rates on the CBR. However treasury has expressed concerns over the slow reaction by commercial banks to reduce the rates following CBKs action.

[Read: Githae calls on banks to lower interest rates faster]

KCB, the biggest bank by asset base in Eastern Africa has appointed Joshua Nyamweya Oigara as the new CEO for the Group. Oigara will replace Martin Oduor-Otieno, who retires in April 2013, as the Group’s Chief Executive Officer.

[Read; KCB appoints Oigara as CEO]