Kenya is moving toward stricter banking governance as Treasury Cabinet Secretary John Mbadi introduces new rules aimed at promoting accountability and safeguarding customers.
The Banking (Penalties) Regulations, 2025, are now under review by the Parliamentary Committee on Delegated Legislation, as lawmakers prepare to scrutinise their potential impact on the financial sector.
The Treasury said on Thursday, November 13, 2025, that the regulations will allow the Central Bank of Kenya (CBK) to enforce compliance more effectively by issuing higher fines to institutions and individuals who breach the Banking Act or other regulatory requirements.
The initiative is part of a broader effort to strengthen the sector’s governance, prevent misconduct, and ensure that banks operate in a manner that protects public funds.
“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 statement said.
Under the new framework, banks may be fined up to Sh20 million for non-compliance, while individuals could face penalties of up to Sh1 million, with extra charges for ongoing breaches.
The rules also introduce a formal appeal process and address violations such as inadequate disclosure to customers, insider lending, and other unethical business practices.
The regulations come in the wake of a 2024 CBK action where 11 commercial banks were fined over Sh5 million each for lending to staff and directors beyond permitted limits.
The episode revealed gaps in internal controls and exposed depositors to unnecessary risk, highlighting the need for a robust compliance system that the new rules seek to provide.
Alongside the banking penalties, CS Mbadi also presented amendments to the Sports, Arts and Social Development Fund and the Government Press Fund.
The Sports, Arts and Social Development Fund (Amendment) Regulations, 2025, will focus resources on sports and arts while removing health-related allocations now managed by the Social Health Authority, improving oversight and transparency.
The Government Press Fund Regulations, 2025, aim to modernise Kenya’s printing and publishing agency, established in 1895.
The Fund will ensure timely production of official documents, including the Kenya Gazette, and strengthen infrastructure for sustainable operations.
All three regulations have been subjected to public consultation and meet the requirements of the Statutory Instruments Act, 2013.
Lawmakers will now examine the proposals and provide recommendations before they are enacted, reflecting the government’s commitment to transparency, good governance, and consumer protection.
