The Central Bank of Kenya Wednesday announced that, with effect from July 1, 2025, it will lift the moratorium on licensing of new commercial banks.
The moratorium that has been in place since November 17, 2015, was imposed against a backdrop of governance, risk management, and operational challenges in the banking sector.
In a press statement, the bank says the temporary suspension was intended to provide space for the strengthening of the Kenyan banking sector.
Since then, the statement says that significant strides have been made in strengthening the legal and regulatory framework for Kenya’s banking sector.
Notably, there have been a number of mergers and acquisitions by existing players and the entry of new domestic and foreign strategic investors into the sector.
According to the Central Bank, 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.
However, following the lifting of the moratorium, the Central Bank said that new entrants to the Kenyan banking sector will be required to demonstrate that they can meet the enhanced minimum capital requirements of Sh10 billion.
“Stronger and more resilient banks will be able to navigate the growing risks in the global, regional, and domestic arenas,” the statement said.
Additionally, the statement said banks will also be able to support large-scale financing needs to meet Kenya’s development aspirations.
– By Wangari Ndirangu
