Kenya Central Bank lifts decade-long bank licensing freeze, doubles core capital

Nairobi, Kenya (PANA) - The Central Bank of Kenya (CBK) has lifted the decade-long moratorium on the licensing of commercial banks and increased the core capital requirement for new banks to strengthen the banking sector. 

In a statement issued on Wednesday, the CBK said it lifted the Moratorium issued on 17 November 2015, following significant developments in the banking sector.

The announcement came following the CBK's latest approval of the takeover of the National Bank of Kenya, formerly a state-owned bank, which was acquired by the Commercial Bank of Kenya (KCB Bank), a regional bank.

On Monday, the CBK approved the NBK takeover by the Access Commercial Bank of Nigeria.

The apex bank said it suspended the licensing of new commercial banks following significant challenges which arose from the Banking sector.

These followed key challenges, including accusations that Kenyan banks had played a role in the laundering of funds from other African countries.

The Victoria Commercial Bank and other tier-three lenders also faced governance challenges, with others failing to meet the core capital requirements.

In the latest arrangement, the Kenyan apex Bank said measures to stabilize the banking sector had achieved significant milestones, following the passing of new regulations contained in Business Laws Amendment Act of 2024, which also raised the core capital requirement.

Previously, banks were required to raise Ksh5 billion as vault cash to be licensed. However, new banks will now require Ksh10 billion or about US$80 million, to obtain the license.

The new measures mean local commercial entities like savings societies, which meet the requisite core capital requirement are free to apply for the bank license.

Savings societies or deposit taking organizations are not allowed to use the name 'banks' unless authorized by the CBK.

  -0- PANA AO/RA 16April2025