New commercial banks will once again be able to establish their presence in Kenya starting July 1, 2025, 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.

The freeze, introduced on November 17, 2015, was triggered by concerns over governance, risk management, and operational weaknesses within the banking sector.

In announcing the decision to lift the ban, the CBK stated, “The moratorium was imposed against a backdrop of governance, risk management, and operational challenges in the banking sector. It was intended 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.

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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, 2024, which raised the minimum core capital requirement for commercial banks to Sh10 billion.

“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 Sh10 billion,” the CBK confirmed.

The regulator added that the new capital regime is aimed at boosting the sector’s resilience in the face of growing economic uncertainties and equipping banks to play a more pivotal role in financing Kenya’s development agenda.

“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.”

The announcement was made in an official statement released on April 16, 2025, by the Central Bank of Kenya.