Higher capital rule to raise competition for large banks

The National Treasury building.

Photo credit: File| Nation Media Group

Global ratings agency Moody’s sees increased competition for large Kenyan banks in the medium-term if the enhanced capital requirements force consolidation among smaller players in the sector, potentially giving customers better terms in pricing of loans and deposits.

The Business Laws (Amendment) Act, 2024 which was signed into law on December 11 requires banks to raise their minimum capital tenfold to Sh10 billion over the next five years.

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