CBK lifts ban on new banks, sets Sh10bn capital requirement
"The lifting of the licensing suspension reflects substantial progress in fortifying Kenya's banking regulatory framework," CBK stated.
The Central Bank of Kenya (CBK) has announced the lifting of a nine-year ban on licensing new banks in the country, effective July 1.
This decision, outlined in a press statement released on Wednesday, marks a major shift in regulatory policy aimed at bolstering Kenya's banking sector.
Initially imposed in November 2015 amidst concerns over governance and operational challenges within the banking industry, the moratorium was intended to facilitate the sector's restructuring and strengthen regulatory frameworks.
CBK cited advancements in these areas, alongside increased mergers and acquisitions among existing banks and the influx of foreign investments, as pivotal factors influencing the decision.
"The lifting of the licensing suspension reflects substantial progress in fortifying Kenya's banking regulatory framework," CBK stated.
The recent amendment to the Business Laws Act, setting the minimum core capital requirement for commercial banks at Sh10 billion, further underscores efforts to enhance sector stability.
With the reopening of the licensing window, aspiring entrants into Kenya's banking sphere must demonstrate their capacity to meet the revised capital prerequisites.
CBK emphasized that this move is poised to broaden access to banking services, supporting national development objectives and fortifying the banking sector against evolving economic challenges.
In its latest Monetary Policy Committee (MPC) report, CBK additionally announced a reduction in the base lending rate to 10.00 %, down from 10.75 %, highlighting efforts to stimulate economic growth through enhanced financial accessibility.