CBK set to end new bank licensing freeze
The Central Bank of Kenya (CBK) has hinted towards lifting the suspension of licensing new banks.
This as the banking regulator announced on Monday that it was in the final process of awarding license to two new banks.
DIB Bank Kenya and Mayfair Bank will over the next few months engage the CBK as steps towards getting final approvals to set up.
In a statement, the central bank said it had already issued the two institutions with approvals in principal, prior to suspending new bank licenses.
The central bank had in November 2015 issued a moratorium on licensing new banks in the wake of two banks being placed under receivership in the space of two months.
“The Central Bank of Kenya announces its intention to finalize the processing of license applications for two institutions that had already been granted an approval in principle, as a first step to lifting the moratorium on licensing of new commercial banks,” CBK said in a statement.
DIB Bank Kenya Limited is a wholly owned subsidiary of the Dubai Islamic Bank PJSC, a leading sharia compliant bank from the United Arab Emirates.
The bank first announced its intentions to set up in 2014, but the process was delayed following the issuance of the moratorium on new bank licensing.
Despite the hitch, DIB has already recruited staff, which will initially comprise three branches offering consumer, corporate and treasury services.
If successful, Kenya will become part of the bank’s operations that includes subsidiaries in Pakistan, Sudan and Jordan.
According to the CBK, Mayfair Bank is owned by a diverse group of Kenyan investors with interests in various sectors.
“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,” the regulator said.
2015 was particularly a rocky year for the banking sector after Dubai Bank and Imperial Bank were placed under receivership in the space of two months.
Chase Bank was also placed under receivership in April 2016.
The freeze on new bank licensing was seen as a move by the CBK to institute new structures and improve banking supervision in a bid to restore confidence.
The freeze on new licenses however opened a window for mergers and acquisitions.
Mauritius’ SBM Group has already announced plans to acuire Fidelity Bank while I&M Holdings has already completed the purchase of Giro Bank.
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