CBK ends 10-year banking licence ban, sets Sh10bn capital threshold
Following the lifting of the moratorium, CBK said all new entrants will be expected to demonstrate their ability to meet the new minimum capital threshold of Sh10 billion.
The Central Bank of Kenya (CBK) has announced that starting July 1, 2025, it will resume licensing of new commercial banks following a ten-year halt that was imposed to address governance and operational weaknesses in the sector.
In a statement on Wednesday, CBK said the moratorium, imposed on November 17, 2015, was meant to create room for reforms in a sector facing governance, risk and operational challenges.
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“The moratorium was imposed against a backdrop of governance, risk management, and operational challenges in the banking sector. It was intended to provide space for the strengthening of the Kenyan banking sector,” it said.
Following the lifting of the moratorium, CBK said all new entrants will be expected to demonstrate their ability to meet the new minimum capital threshold of Sh10 billion.
“New entrants to the Kenyan banking sector will be required to demonstrate that they can meet the enhanced minimum capital requirements of Sh10 billion,” the CBK said.
The central bank said the move aims to ensure that only strong and resilient institutions are allowed into the market, capable of withstanding shocks and providing financing for the country’s development agenda.
“Stronger and more resilient banks will be able to navigate the growing risks in the global, regional, and domestic arenas. Additionally, they will be able to support large-scale financing needs to meet Kenya’s development aspirations,” it said.
The regulator noted that over the past decade, the sector has undergone significant transformation, including improvements in the legal and regulatory environment.
This has been accompanied by mergers and acquisitions involving existing players, as well as the entry of new domestic and international strategic investors.
“Since then, significant strides have been made in strengthening the legal and regulatory framework for Kenya’s banking sector,” the statement read.
The CBK also highlighted the enactment of the Business Laws (Amendment) Act, 2024, which increased the minimum core capital requirement for commercial banks to Sh10 billion, as a key move to further reinforce stability in the sector.
“The recent increase in the Business Laws (Amendment) Act, 2024, of the minimum core capital requirements for commercial banks to Sh10 billion will further reinforce the strengthening of the banking sector,” the CBK said.
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