CBK Governor Put on Spot Over New Banking Fees Proposal

CBK Governor Kamau Thugge appears before the parliamentary committee at Bunge Towers on July 30 to address concerns over CBK’s proposed banking fees. PHOTO/ Parliament of Kenya Facebook

Members of the National Assembly’s Committee on Delegated Legislation put Central Bank of Kenya (CBK) Governor Kamau Thugge on the spot over the proposed Banking Fees Regulations, 2026, raising legal, constitutional, and consumer-protection concerns.

In a joint meeting held with the Governor on Thursday, July 30, 2026, lawmakers warned that the new fee regime could increase the cost of banking services and expose the regulations to court challenges if key legal gaps remain unresolved.

Thugge appeared before the committee and defended the proposals, saying they aim to modernise a fee structure that has remained unchanged since 1994 despite rapid growth in the banking sector.

The proposed regulations seek to replace the current flat annual fee based on the number of bank branches with a levy equivalent to 0.15 per cent of a bank’s gross annual revenue.

Legal Basis of CBK Proposal Foundation Questioned

Committee Vice-Chairperson Robert Githinji questioned the legal foundation of the proposal, arguing that the term “banking fees” does not exist in the Banking Act.

“You need to create a term called ‘banking fees’ because Section Five of the Act does not contain that term. Without it, the regulations could be vulnerable to legal challenge,” Githinji said.

Meanwhile, lawmakers sought clarity on how CBK defines gross annual revenue under the proposed framework.

Robert Mbui (Kathiani) questioned whether customer deposits would be included in the calculation and warned that an overly broad definition could unfairly burden banks and, ultimately, customers.

In response, Thugge clarified that customer deposits are liabilities, not revenue, and said the levy would rely on audited interest income generated from loans and investments in government securities.

Also Read: CBK Reveals Banks Offering Cheap Loans to Kenyans [FULL LIST]

New Banks and Projected Fees

At the same time, the committee challenged provisions requiring newly licensed banks to pay fees based on projected revenues, noting that the regulations do not outline a clear legal mechanism for rejecting unrealistic projections.

Thugge responded that new banks must pay before commencing operations and explained that, without historical financial data, projected revenues provide the only practical basis for determining initial fees.

Penalty Clause Draws Criticism

Lawmakers also criticised Regulation 5, which proposes a 100 per cent penalty for institutions that fail to pay the annual fee by December 31.

“You are being asked to pay double the amount and still face the risk of losing your licence. That amounts to double jeopardy,” Mbui said.

He added that the deadline falls during the festive season, when many institutions operate with reduced staffing, potentially complicating compliance.

Also Read: Centum Investment Company Appoints Mary Wangari Wamae as Independent Non-Executive Director

CBK Defends Oversight Needs

Even so, Thugge argued that the additional revenue would enhance CBK’s supervisory capacity, particularly in emerging areas such as cybersecurity, artificial intelligence and anti-money laundering.

He added that stronger oversight remains critical as Kenya works towards exiting the international financial monitoring grey list.

The committee said it will continue scrutinising the regulations before tabling its report in the House.

Lawmakers also indicated they may seek input from banking industry stakeholders and consumers before making final recommendations.

Follow our WhatsApp channel for instant news updates