CBK plans major changes to banking fees after 33 years

The Central Bank of Kenya (CBK) has announced plans to revise banking fees, shifting from the current branch-based model to one based on a bank’s annual revenue.

The proposed Banking (Fees) Regulations, 2025, will take effect once published in the Kenya Gazette.

According to CBK, the fees will be determined by a bank’s total earnings, including income from loans, government securities, fees, commissions, foreign exchange trading, and dividends.

These figures will be drawn from audited financial statements of the previous year to ensure banks contribute in proportion to their revenues.

Under the new framework, the fees must be paid before a bank is issued a license and will be due annually, no later than 15 days after the release of audited financial statements.

The regulator emphasized that, as per the Banking Act, no extra charges will be imposed beyond the set fees.

Currently, banks pay licensing fees based on the number of branches they operate, meaning those with more branches incur higher costs.

However, CBK noted that this system has remained unchanged for over three decades despite the massive growth of the banking sector.

“The Kenyan banking sector has grown significantly over the past 30 years. Total assets have increased by more than 38 times, from sh202 billion in 1994 to Sh7.6 trillion in 2024,” CBK stated in a consultative paper review.

“However, despite this growth, the license fees for commercial banks have remained unchanged,” it reads further.

CBK stated that the review of fees under the Fourth Schedule of the Banking Act was long overdue, given that the last update was made in 1990.