The third quarter of 2017 saw a number of changes in the
regulatory framework of the Rwandan financial sector, the most
significant of which included a change in the law governing the
regulator of the financial sector (the National Bank of Rwanda) and
the enactment of the New Banking Act governing the organisation of
banking, both of which were gazetted in October 2017. The New
Banking Act brought about many changes, but one that will affect
banking business most significantly, particularly in the lending
market, is the introduction of the in duplum
rule.
In duplum directly translates to "double the
amount", but in law the in duplum rule provides that
arrear interest ceases to accrue once the sum of the unpaid
(accrued) interest equals the amount of capital outstanding at the
time (and not the amount of capital originally advanced). To
illustrate the in duplum rule, if someone borrows
RWF5-million and had already repaid RWF3-million, under the in
duplum rule, the
