NAIROBI, Kenya – Lawmakers have raised concerns over the Central Bank of Kenya’s (CBK) proposed Banking Fees Regulations, 2026, warning that the new levy on commercial banks could ultimately translate into higher banking costs for consumers.
The concerns emerged on Thursday, July 30, when CBK Governor Kamau Thugge appeared before the National Assembly’s Committee on Delegated Legislation to defend the proposed regulations aimed at overhauling the regulator’s fee structure.
Under the proposal, the CBK wants to replace the current fixed annual fee charged according to the number of bank branches with a levy equivalent to 0.15 per cent of a bank’s gross annual revenue.
Thugge told the committee that the existing fee model has remained unchanged since 1994 despite significant changes in Kenya’s banking industry, arguing that the new framework would provide a fairer and more sustainable funding mechanism for banking supervision.
However, Members of Parliament questioned whether the new charges would eventually be passed on to customers through higher banking fees.
Kathiani MP Robert Mbui sought clarification on what would constitute “gross annual revenue,” asking whether customer deposits would be factored into the calculation.
In response, Thugge explained that customer deposits are treated as liabilities and would not form part of the levy. Instead, the charges would be calculated using audited interest income earned from loans and investments.
The committee also raised legal concerns over the proposed regulations.
Gichugu MP Robert Githinji questioned whether the Banking Act grants the Central Bank sufficient legal authority to introduce the new levy, while legislators also challenged the use of the term “banking fees,” arguing that it is not expressly provided for under the existing law.
Lawmakers further took issue with provisions requiring newly licensed banks to pay annual fees based on projected revenues, saying the regulations do not provide a clear framework for determining those estimates.
Another contentious proposal is a 100 per cent penalty for institutions that fail to pay the annual levy by the prescribed deadline.
MPs argued that the penalty is excessive, especially since non-compliance could also expose banks to regulatory action, including the possible loss of their operating licences.
“You are being asked to pay double the amount and still face the risk of losing your licence. That amounts to double jeopardy,” Mbui told the committee.
Legislators also questioned the timing of the payment deadline, noting that it falls during the holiday season when many institutions operate with reduced staffing levels.
Defending the proposal, Thugge said the revised fee structure would strengthen the CBK’s supervisory capacity, enabling the regulator to invest more in cybersecurity, artificial intelligence, anti-money laundering systems and other emerging regulatory responsibilities.
The Committee on Delegated Legislation said it will continue scrutinising the Banking Fees Regulations, 2026, and is expected to seek submissions from banks, consumers and other stakeholders before presenting its recommendations to Parliament.
