Nairobi: The Central Bank of Kenya announced plans to lift the moratorium on licensing new commercial banks, effective July 1, 2025. This decision marks the end of a restriction that has been in place since November 17, 2015, initially implemented to address governance, risk management, and operational challenges within the banking sector.

According to Kenya News Agency, the Central Bank highlighted in its press statement that the moratorium was crucial for providing space to strengthen the Kenyan banking sector. Over the past years, significant improvements have been made to the legal and regulatory framework governing the sector. These changes have facilitated a number of mergers and acquisitions by existing banks and attracted new domestic and foreign strategic investors.

The Central Bank also noted that the recent amendment to the Business Laws in 2024, which increased the minimum core capital requirements for commercial banks to Sh10 billion, is expected to further fortify the banking sector. New entrants to the market will need to meet these enhanced capital requirements to obtain licenses, ensuring that they are robust enough to navigate global, regional, and domestic risks.

The Central Bank's statement emphasized that stronger banks will be better positioned to support large-scale financing initiatives, aligning with Kenya's development goals.