Moratorium lifted on commercial bank licences

New commercial banks will once again be able to establish their presence in Kenya starting 1 July, following a decision by the Central Bank of Kenya (CBK) to lift the moratorium on licensing that has been in place for nearly a decade, reports Swala Nyeti. The freeze, introduced on 17 November 2015, was triggered by concerns over governance, risk management, and operational weaknesses within the banking sector. The CBK stated that the moratorium was imposed to provide space for the strengthening of the Kenyan banking sector. Over the past nine years, the regulator noted that Kenya’s banking industry has undergone considerable transformation. These include key legal and regulatory reforms, a series of mergers and acquisitions among existing financial institutions, and the entry of both local and international investors into the space. The CBK said the sector had reached a level of maturity that warranted the reopening of the licensing window, albeit with new entry requirements. The most significant of these is a steep capital threshold introduced through the Business Laws (Amendment) Act, which raised the minimum core capital requirement for commercial banks to Sh10bn ($ 76 970 400).

Full report in Swala Nyeti