The ban was implemented in 2015 following the collapse of Dubai Bank and Imperial Bank, which shook public trust in the sector as risk management and operational challenges took place. The change comes as CBK sees improvements in the legal and regulatory framework governing the country’s industry.
To enter the Kenyan banking market, new applicants must meet a minimum capital requirement of KES 10 billion (USD 77 million), a significant increase from the previous KES 1 billion. This change was introduced in the 2024 Business Laws Amendment Act, aiming to ensure that only well-capitalised and stable institutions can operate in the country’s banking market.
During the moratorium, the number of banks in Kenya decreased from 44 to 38 due to mergers and acquisitions. Notable deals include KCB Group’s purchase of National Bank of Kenya, and Equity Group’s takeover of Spire Bank. These consolidations were part of CBK’s strategy to strengthen the banking sector.
The lifting of the ban is projected to attract local and international investors interested in establishing new banks. CBK believes that stronger and more resilient banks are essential for navigating risks in the global, regional, and domestic ecosystems. With this move, Kenya’s banking sector is poised for growth and increased competition, offering new opportunities for financial inclusion and economic development.
CBK revealed that with the window opened for new entrants into the industry, more Kenyans will be able to access more banking products that will go a long way in meeting the development needs of the country. This follows CBK’s latest Monetary Policy Committee (MPC) report which announced that it had reduced the base lending rate to 10.00 % from 10.75 %.
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