CS Mbadi tables new banking rules targeting non-compliance, unethical practices
The proposed regulations will empower the Central Bank of Kenya (CBK) to levy heavier penalties on banks that fail to follow the Banking Act and other regulatory guidelines.
Kenya’s financial sector may soon face stricter oversight as Parliament examines new banking penalty rules designed to enforce compliance more effectively.
The Banking (Penalties) Regulations, 2025, presented by Treasury Cabinet Secretary John Mbadi, are under review by the Parliamentary Committee on Delegated Legislation.
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The Treasury said on X on Thursday, November 13, 2025, that the proposed regulations will empower the Central Bank of Kenya (CBK) to levy heavier penalties on banks that fail to follow the Banking Act and other regulatory guidelines.
The measures are intended to make fines meaningful and deterrent, aligning local practices with international banking standards, particularly the Basel Core Principles.
“The Banking (Penalties) Regulations, 2025, strengthen the compliance framework within the financial sector by empowering the CBK to impose stiffer penalties for violations of the Banking Act and related guidelines,” the Treasury statement reads.
Under the new rules, institutions could be fined up to Sh20 million, while individuals may face penalties of up to Sh1 million, with additional daily fines for ongoing non-compliance.
The regulations also introduce a formal appeal system and address violations such as failing to give sufficient customer information or engaging in unethical business practices.
The move comes after the CBK in 2024 fined 11 commercial banks over Sh5 million each for insider lending violations. Banks had exceeded lending limits to staff and directors, putting depositors’ money at risk and exposing gaps in governance.
These incidents highlighted the need for a robust framework to enforce discipline, which the new regulations aim to provide.
CS Mbadi also brought before Parliament amendments to the Sports, Arts and Social Development Fund and the Government Press Fund.
The Sports, Arts and Social Development Fund (Amendment) Regulations, 2025, focus the Fund’s resources on sports and arts, removing health-related funding now handled by the Social Health Authority, and improving transparency and governance.
The Government Press Fund Regulations, 2025, seek to modernise Kenya’s central printing and publishing agency, established in 1895.
The Fund will support the timely production of official documents, including the Kenya Gazette, and strengthen infrastructure to ensure sustainable operations.
All three regulations have undergone public participation and comply with the Statutory Instruments Act, 2013, reflecting the government’s commitment to transparency and accountability.
Lawmakers will now review the proposals and offer recommendations before they are officially enacted.
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