Kenya’s Central Bank (CBK) has fined 11 commercial lenders for violating lending, capital, and governance rules in 2024, as it steps up pressure on the sector to align with its policy push for cheaper credit. The regulator collected KES 191 million ($1.48 million) in penalties from banks and forex bureaus in the year to June, down from 12 institutions penalised in 2023, according to its report.
The enforcement drive underscores the CBK’s willingness to tighten supervision at a time when it is also leaning on monetary policy to steer lending behaviour. Since February 2024, the Monetary Policy Committee has slashed the central bank rate from 13% to 9.75% to spur lending, but policymakers say banks have been slow to lower their rates, a gap that threatens to blunt stimulus efforts.
According to the CBK report, most violations in 2024 involved breaking the rule that bars lending more than 25% of core capital to a single borrower. Nine banks breached the limit, in some cases because losses had eroded their capital base. Other offences included excessive insider lending, liquidity shortfalls, and breaches of ownership caps.
Governance lapses also worsened: three banks had individual owners controlling over 25% of shares, up from one the year before, while five lenders failed to meet statutory capital minimums ahead of a planned increase in 2025. Three fell below the 20% liquidity ratio.
The CBK did not name the institutions or disclose individual fine amounts, citing the sensitive nature of the industry.
Since June, it has begun on-site inspections and warned lenders that failure to pass on lower rates to borrowers could attract daily penalties of up to KES 100,000 ($774) per violation.
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