Have reduced interest rates led to job cuts?

Banks used to earn 70 per cent interest on loans before the capping of interest at four percentage points above 10 per cent Central Bank Rate (14 per cent). It appears the capping has lowered the bank’s profit margin. Family Bank was the first to publicly declare a voluntary retrenchment programme.

And now Sidian Bank plans to send home at least 108 of its 506 staff at the one-off cost of Sh700 million. The bank claims that there is slow revenue and that it is enforcing the use of technology.

The banking industry fired 2,036 staff in 2015 as lenders automated their systems to enhance operations. My question is, before the president signed the Bill into law, were there plans to send home these workers? Were banks earning illegal profits in which they were using to pay their employees?

Are banks set on improving their overall performance or only want to attract more profit to themselves? It would have been prudent for banks to look for ways of boosting their customer base and making good attractive packages, investments so as to retain their workers, some of who have proved to be invaluable to the banking industry.

Let the Department of Labor and the banking union take notice of this development to rescue bank employees from job loss.