CBK to lift 10-year ban on licensing new banks in July 2025

The Central Bank of Kenya has said it will lift the moratorium on licensing of new commercial banks on July 1, 2025, which may see more lenders enter the market.

The moratorium, which has been in place from November 17, 2015, was imposed against a backdrop of governance, risk management, and operational challenges in the banking sector.

The lifting of the moratorium paves way for new players to enter the banking sector, provided they demonstrate that they can meet the enhanced minimum capital requirements of Sh10 billion

“Following the lifting of the moratorium, new entrants to the Kenyan banking sector will be required to demonstrate that they can meet the enhanced minimum capital requirements of Sh10 billion,” CBK said in a public notice yesterday.

The moratorium was intended to provide space for the strengthening of the Kenyan banking sector.

“Since then, significant strides have been made in strengthening the legal and regulatory framework for Kenya’s banking sector.

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Notably, there have been a number of mergers and acquisitions by existing players and entry of new domestic and foreign strategic investors into the sector.”

According to CBK, the recent increase in the Business Laws (Amendment) Act, 2024, of the minimum core capital requirements for commercial banks to Sh10 billion will further strengthen the banking sector.

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.

Mayfair Bank and DIB Bank Kenya were the last lenders to be licensed. At the time the moratorium was imposed, they had already been given approval in principle by CBK and were later licensed in 2017.

Chase Bank Kenya was the last to be licensed before the moratorium, but the licence was revoked in 2021, paving way for its liquidation.