Kenya to Lift Nine-Year Ban on New Bank Licenses From July 2025, Sets KSh 10B Capital Requirement

The Central Bank of Kenya (CBK) will lift its nine-year moratorium on licensing new commercial banks, effective July 1, 2025. The moratorium began on November 17, 2015, after the collapse of Dubai Bank Kenya Limited and Imperial Bank Limited, as part of efforts to strengthen the sector's legal and regulatory framework. New banks will be required to meet an enhanced minimum core capital requirement of KSh 10 billion, up from KSh 1 billion, as outlined in the 2024 Business Laws (Amendment) Act. Existing banks below this threshold must incrementally increase their core capital, reaching KSh 3 billion by the end of 2025, KSh 5 billion by the end of 2026, KSh 7 billion by the end of 2027, KSh 8 billion by the end of 2028, and KSh 10 billion by December 2029. During the moratorium, the number of commercial banks in Kenya fell from 44 to 38, primarily through mergers and acquisitions involving both domestic and foreign investors. The last banks to receive new licenses were Dubai Islamic Bank and Mayfair Bank in 2017, based on applications made before the moratorium. CBK stated that the improved governance, risk management, and operational standards in the sector have prompted the decision to resume licensing. The new regime will allow investors to obtain greenfield banking licences, expanding options beyond mergers and acquisitions.