CBK Introduces Revenue-Based Licensing Fee Model for Banks

The Central Bank of Kenya (CBK) has introduced a new revenue-based licensing fee model for banks, replacing the branch-based system that had been in place for more than three decades.

According to a notice dated July 9,  CBK said the changes are contained in the Banking (Fees) Regulations, 2026 (Legal Notice No. 81 of 2026), which revoke the previous regulations and establish a new revenue-based model for calculating annual fees.

Under the new regulations, licensed banking institutions will pay annual licence fees calculated as a percentage of their gross annual revenue rather than the number of branches they operate.

CBK Replaces Branch-Based Bank Licence Fees With Revenue Model

According to CBK, the rates will be introduced as follows:

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The bank stated that the regulations will require banks to remit the annual fees as a lump sum by the prescribed compliance dates.

“The annual fees payable under section 5(4) of the Act by an institution shall be at the rate of the gross annual revenue specified in the third column of the Schedule by the date specified in the second column of the Schedule,” CBK stated.

The introduction of the new regulations marks the first major review of Kenya’s bank licence fee framework in more than three decades.

Under the former regulations, banks paid Ksh 400,000 for the grant of a licence and on each anniversary thereafter, in addition to branch fees of Ksh 150,000 for branches within municipalities, Ksh 100,000 for branches in town council areas, and Ksh 30,000 for branches in urban council areas.

New Licensing Fees and Penalties Introduced

CBK further noted that the regulations set the application fee for a banking licence at Ksh 5,000.

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However, before starting operations, newly licensed banks, financial institutions, and mortgage finance companies will be required to pay annual fees based on their projected average gross annual revenue for the first three years after receiving a licence.

“Before the commencement of banking business, financial business or the business of a mortgage finance company in Kenya, an institution which has been granted a licence under section 4 of the Act shall pay the annual fee specified in paragraph (1) based on the average projected gross annual revenue of the institution for three years immediately following the grant of the licence,” read part of the notice.

In addition, CBK stated that institutions that fail to pay their annual licence fees by the prescribed deadline will be required to pay double the amount due within 90 days.

Failure to comply within that period may result in the revocation of the institution’s licence in accordance with the Banking Act.

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A photo showing CBK’s bank licensing fee notice. Photo/ File