16.1 C
Tuesday, August 3, 2021

Commercial banks shocker for borrowers

Must read

Commercial banks are set to recover Sh1.6 trillion worth of restructured loans as the one year period of waivers comes to an end this month.

This means that thousands of Kenyan borrowers will be making a sweat to repay the loans they borrowed but were given waivers to alleviate adverse economic effects of the COVID-19 pandemic while ensuring lenders remain afloat.

“Where a determination is made to grant a request for relief on personal loans through extension of the repayment period, the extension should not exceed one year from March 2, 2020,” said a Central Bank of Kenya letter to banks and mortgage institutions at this period last year.

End of loan repayment extensions which started taking effect yesterday will run up to March 31 when borrowers will be expected to have settled all their undertakings including the principal amounts and interest on their loans under the COVID-19 loan agreements.

The debt-relief measures by CBK, saw customers apply for their loans to be restructured, credit lines expanded and loan tenures extended to keep them financially afloat.

However, those who did not apply for the arrangement were caught napping yesterday after some banks sent them notices informing them that they had already recovered their money.

But some lenders have now gone a step further, recovering the entire amounts borrowed and the interest accrued during the one-year window, effectively wiping out the entire savings of hundreds of borrowers despite incomes not having fully recovered from the coronavirus pandemic shocks.

Some of the affected victims say, they were left with negative balances as banks moved in for the spoils, and most fear that the auctioneer’s hammer looms large since they are to revert to the pre-virus interest rates.

“They raided my account today and the salary was gone despite having been in talks with the bank since last month. I was just waiting to sign the letter which they have been holding, only for them to agree but swept all the money in my account to pay some fines and interest,” said one of the victims.

- Advertisement -spot_img


Please enter your comment!
Please enter your name here

- Advertisement -spot_img