Kenya's central bank to lift ban on licensing of new lenders

Monday March 13 2017

The Central Bank of Kenya. PHOTO | FILE

The Central Bank of Kenya: The regulator says it will lift the ban on licensing new banks. PHOTO | FILE 

By MARYANNE GICOBI

The Central Bank of Kenya (CBK) will lift a ban on licensing of new banks.

The bank said it would finalise licences for operations of two lenders, which had been granted interim permits before the ban came into effect in November 2015.

The restriction on licences was intended to give the regulator time to enhance its supervisory capacity following the collapse of Imperial Bank and Dubai. A third bank – Chase Bank – was also placed under management but has since resumed operations.

In a move that will likely interest commercial banks looking to enter the Kenyan market, CBK said the two lenders that had been granted an “approval in principle”, DIB Bank Kenya and Mayfair Bank, “will take the remaining steps to finalise their licence applications.”

DIB Kenya is a wholly owned subsidiary of United Arab Emirates’ Dubai Islamic Bank while Mayfair Bank is owned by Kenya investors.

“The entry of these banks on the fulfilment of all the pre-licensing conditions will expand the range of banks’ business models and underscore Kenya’s growing stature as a regional financial services hub," said CBK.

DIB Bank Kenya was reported to have spent $20 million on preparing for operations before the moratorium came into force.