Banks set to revise transaction costs as CBK announces plan to revise banking fees
In response to the proposed regulations, banks are expected to revise their transaction fees, loan processing fees and interest rates on loans and credit facilities upwards.
The Central Bank of Kenya has announced plans to revise banking fees, with the banking sector expecting a radical shift.
The new changes are expected to take effect upon publication in the gazette notice.
The regulator has indicated that the proposed banking fees regulation 2025 will be determined based on the bank’s annual gross revenue, including loans, government securities, fees, commissions, foreign exchange trading, and dividends.
The gross annual revenue will be calculated using the audited financial statements from the last financial year.
CBK Governor Kamau Thugge said the banks shall pay fees in proportion to their earning.
With the new proposals, the fees will be settled before a bank is granted a licence, and it will be payable annually not later than fifteen days after the publication of audited statements.
The regulator has also clarified that under the new Banking Act, no additional charges will be imposed beyond the specified fees.
Currently, the CBK calculates banking Licence fees based on the number of branches a bank operates.
Under this methodology, the more branches a bank has, the higher the Licence fees it is required to pay.
According to CBK, the proposal to review banking license fees and other charges for commercial banks under the Fourth Schedule of the Banking Act has been long overdue as the last update to these fees was 33 years ago, in 1990.
“The Kenyan banking sector has grown significantly over the past 30 years. Total assets have increased by more than 38 times—from Sh202 billion in 1994 to Sh7.6 trillion in 2024. Despite this growth, the licence fees for commercial banks have remained unchanged,” they stated in the consultative paper review.
The proposed revision of banking license fees by the CBK is likely to have a ripple effect on ordinary Kenyans, particularly in terms of banking costs, accessibility, and overall financial services.
Since the proposals indicate that banking license fees will be based on a bank’s gross annual revenue, larger banks with higher earnings may have to pay more to maintain their licenses.
In response to the proposed new regulations by CBK, banks are expected to revise their transaction fees, loan processing fees and interest rates on loans and credit facilities upwards.
