NAIROBI, Kenya – Kenya’s financial sector could soon face stricter oversight as Parliament reviews new regulations aimed at enforcing compliance more effectively.
The Banking (Penalties) Regulations, 2025, presented by Treasury Cabinet Secretary John Mbadi, are currently under scrutiny by the Parliamentary Committee on Delegated Legislation.
If passed, the regulations will give the Central Bank of Kenya (CBK) powers to levy heavier fines on banks and individuals that violate the Banking Act and other regulatory guidelines.
According to the Treasury, the rules are designed to make penalties more meaningful and deterrent, aligning local practices with international standards, particularly the Basel Core Principles.
Under the proposed framework, financial institutions could face fines of up to Sh20 million, while individuals may be penalised up to Sh1 million, with additional daily fines for continued non-compliance.
“The Banking (Penalties) Regulations, 2025, strengthen the compliance framework within the financial sector by empowering the CBK to impose stiffer penalties for violations of the Banking Act and related guidelines,” the Treasury said in a statement.
The regulations also introduce a formal appeal system and outline penalties for lapses such as failing to provide sufficient customer information or engaging in unethical practices.
The move comes after the CBK in 2024 fined 11 commercial banks over Sh5 million each for exceeding lending limits to staff and directors, exposing gaps in governance and risking depositors’ funds.
These incidents underscored the need for a robust compliance framework.
CS Mbadi also presented amendments to the Sports, Arts and Social Development Fund and the Government Press Fund.
The amendments to the Sports and Arts Fund focus resources on sports and arts while transferring health-related allocations to the Social Health Authority.
Meanwhile, the Government Press Fund regulations aim to modernise Kenya’s central printing and publishing agency, ensuring timely production of official documents, including the Kenya Gazette.
All three sets of regulations underwent public participation and comply with the Statutory Instruments Act, 2013, highlighting the government’s commitment to transparency and accountability.
Lawmakers will now review the proposals and provide recommendations before enactment.
