According to The East African, over the past five months, out of the top five commercial banks — Barclays, KCB, Equity, Co-operative Bank and Standard Chartered — four have rolled out promotional campaigns to lure depositors in the wake of increased competition. Only Equity Bank has not rolled out a promotional campaign.

Banks have put much focus on their retail clients as they pay them low interest rates, mostly low end single digits as opposed to what large corporate depositors would ask for.

In the first quarter of 2012, reports The East African, the top five banks paid out a total of Ksh2.5 billion ($29.76 million) in interest expense compared with Ksh600 million ($7.14 million) in the same period in 2011. Interest expense is the interest banks pay customers on their deposits.

An earlier bid to have a base on the interest earning deposits was thwarted by parliament when it failed to pass amendments in the Finance Bill 2011/2012 to have interest rates on loans capped. The law would have seen all depositors enjoy better interest rates on their money.