The Central Bank of Kenya fined 11 commercial banks for regulatory violations in 2024, the regulator disclosed in its latest annual supervision report. Penalties collected from banks and forex bureaus in the year to June 2024 totalled KES 191 million, approximately $1.48 million. The penalties covered breaches of 10 regulatory rules, spanning single-borrower lending limits, insider lending, ownership limits, minimum capital requirements and statutory liquidity ratios.
The number of institutions penalised declined from 12 in 2023 to 11 in 2024. The CBK did not name the eleven banks or disclose individual fine amounts, citing the sensitive nature of the banking industry as its rationale for withholding the identities of those penalised.
LENDING LIMITS AND CAPITAL FLOORS BREACHED
Nine of the eleven banks were found to have violated the regulatory rule barring any single borrower from receiving credit exceeding 25% of a lender's core capital. Excessive insider lending was also identified. Three banks additionally had individual shareholders controlling more than 25% of their respective institutions, breaching ownership concentration limits.
Five of the eleven banks failed to meet statutory capital minimums, and three fell below the 20% liquidity ratio that all commercial banks licensed in Kenya are required to maintain.
RATE TRANSMISSION WARNING
Separately, the regulator warned that banks failing to pass reductions in the policy rate through to their retail and corporate borrowers face daily penalties of up to KES 100,000.
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