The Central Bank of Kenya (CBK) has lifted the temporary suspension that the government had put in place on the licensing of new banks in the country.
In a press statement released on Wednesday, CBK confirmed that the moratorium that had been in place since November 17, 2015, will be lifted effective July 1 this year.
The temporary suspension was imposed against a backdrop of governance, management, and operational challenges in the banking sector.
Further, it was intended to provide space for the strengthening of the Kenyan banking sector, according to CBK.
According to CBK, the lifting of the suspension has been informed by the strides that have been made in strengthening the legal and regulatory framework guiding the operations of the banking sector.
Additionally, it indicated that the developments have been informed by the growing number of mergers of banks and the influx of foreign investors into the sector.
''Since then, significant strides have been made in strengthening the legal and regulatory framework for Kenya's banking sector. Notably, there have been several mergers and acquisitions by existing players and the entry of new domestic and foreign strategic investors into the sector,'' CBK stated.
''The recent increase in the Business Laws (Amendment) Act, 2024, of the minimum core capital requirements for commercial banks to Ksh10 billion will further reinforce the strengthening of the banking sector,'' it added.
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 Ksh10 billion.
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.
''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,'' it added.
CBK, in its latest Monetary Policy Committee (MPC) report published on Tuesday, April 8, announced that it had reduced the base lending rate by 75 basis points to 10.00 per cent from 10.75 per cent.
