Members of the National Assembly’s Committee on Delegated Legislation have expressed reservations about the Central Bank of Kenya’s (CBK) proposed Banking Fees Regulations, 2026, which would introduce a 0.15% levy on banks’ gross annual revenue.

The regulations, presented by CBK Governor Kamau Thugge on July 30, 2026, seek to replace the existing flat annual fee linked to the number of bank branches. The Governor explained that the revision aims to update a fee structure unchanged since 1994 to reflect the evolving banking sector.

Legal Basis and Definition Concerns

  • Committee Vice-Chair Robert Githinji (Gichugu) challenged the legal foundation for the new fees, noting the term "banking fees" is absent from the Banking Act, potentially exposing the regulations to legal challenges.
  • MP Robert Mbui (Kathiani) requested clarity on the calculation of gross annual revenue, questioning whether customer deposits would be included.

Governor Thugge clarified that customer deposits are classified as liabilities and excluded from revenue calculations. Instead, the levy would be based on audited interest income from loans and government securities investments.

Issues on Penalties and Revenue Projections

  • The committee scrutinised a clause requiring newly licensed banks to pay fees based on projected revenue, noting the lack of clear criteria on how projections would be verified or rejected.
  • Thugge responded that new banks must pay fees before commencing operations, with projected revenue serving as the basis for initial payments due to lack of prior financial records.
  • Regulation 5, which proposes a 100% penalty for late payments by December 31, drew criticism. Mbui described the penalty as "double jeopardy" and raised concerns about the timing coinciding with the festive season.

CBK’s Justification and Next Steps

Governor Thugge defended the levy, stating the additional revenue would enhance CBK’s supervisory capabilities in areas such as cybersecurity, artificial intelligence, and anti-money laundering efforts. Strengthened oversight is seen as vital for Kenya’s efforts to exit the international financial monitoring grey list.

The committee will continue reviewing the regulations, consulting banking stakeholders and consumers before submitting a report to the National Assembly. The outcome will determine whether the 0.15% levy proceeds as proposed or undergoes revision.