.jpg)
| |||||||||
|
|||||||||
|
By:
Moses Michira | |||||||||
| Posted:
Nov,29-2015 16:37:02
| |||||||||
|
NAIROBI, Kenya--The central bank of Kenya (CBK) Governor Patrick Njoroge has issued a moratorium on licensing of new banks but allowed mergers and acquisitions in the sector.
"The Central Bank of Kenya has, with immediate effect, placed a moratorium on the licensing of new commercial banks until further notice. This moratorium, however, does not apply to cases relating to resolution, amalgamation and acquisition of banks," Njoroge said in a statement issued late Tuesday.
The moratorium effectively locks out several local and international firms which have expressed interest in setting up operations in Kenya's lucrative banking sector.
However, the CBK did not explain the reason for the bold step, but noted that the moratorium that takes immediate effects would remain in force until further notice.
Last month, the central bank placed privately-owned Imperial Bank under receivership after Imperial's board alerted it to malpractices at the lender.
The CBK later said it unearthed fraud within Imperial Bank, but that the bank was still viable and shareholders were considering a proposal to inject capital.
Last week, it said it was concerned that the shareholders of Imperial Bank were not acting quickly enough to come up with a proposal to revive the mid-sized lender.
In June, Treasury raised minimum capital for commercial banks to Sh5 billion that should be met in the next three years from the the current Sh1 billion.
National Treasury Cabinet Secretary Henry Rotich said in his budget speech that the sharp increase in minimum tier one capital --comprising equity and declared reserves--will boost banks' ability to finance larger projects while safeguarding their stability.
Analysts say the new core capital target could fuel a new round of mergers in the banking sector.
| |||||||||
|
Source:
| |||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSS