meta_id 3256358

In April 2026, the Central Bank of Kenya (CBK) published a Regulatory Impact Statement on the Banking (Fees) Regulations, 2026, which will replace the Banking (Fees) Regulations, 1994. The new regulations, developed pursuant to Section 55(1) of the Banking Act, establish application fees payable to the CBK, prescribe the manner of fee payment, define sanctions for non-payment, and set annual fee rates for CBK-licensed institutions. The CBK undertook this comprehensive regulatory overhaul to align supervisory costs with modern banking dynamics and international standards. Kenya's banking sector has experienced substantial growth over the past 32 years: total assets increased more than 40-fold from Kenyan Shilling (Ksh) 202 billion in 1994 to Ksh 8.4 trillion by December 2025; deposits increased more than 34 times; and the loan portfolio expanded more than 37 times. Despite this expansion, annual fees for commercial banks remained unchanged since 1994. The CBK's regulatory mandate has become increasingly complex, requiring enhanced resources for consolidated and cross-border supervision, anti-money laundering and counter-terrorism financing (AML/CTF) activities, and cybersecurity measures. The CBK evaluated multiple fee methodologies—branch-based, deposit-based, asset-based, revenue-based, and standard set fees—before adopting a Gross Annual Revenue (GAR) methodology. The initial proposed rate of one percent, prorated over three years, was revised downward to 0.15 percent of GAR following stakeholder consultation. A sensitivity analysis confirmed the proposed fees will not adversely affect profitability or convert profitable institutions into loss-making entities. The regulations will enhance supervisory oversight to strengthen banking sector integrity. The CBK recommends adoption and publication of the Banking (Fees) Regulations, 2026, with implementation details and compliance dates outlined in the accompanying schedule.