CBK PENALISES 33 BANKS OVER CREDIT PRICING AS COMPLIANCE VIOLATIONS TRIPLE
CBK penalises 33 of Kenya's 38 commercial banks for failing to comply with risk-based credit pricing rules, as overall regulatory violations more than triple to 35 banks in a year.
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The Central Bank of Kenya (CBK) has penalised 33 commercial banks for failing to comply with its risk-based credit pricing requirements, according to the regulator’s latest Bank Supervision Annual Report.
The findings followed targeted inspections conducted in 2025 to assess how commercial banks were implementing the Risk-Based Credit Pricing Model (RBCPM), a framework designed to guide the pricing of loans according to borrowers’ risk profiles.
CBK said penalties were imposed on 33 banks, while two other lenders faced administrative action. Only three of the country’s 38 commercial banks were found to be fully compliant with the RBCPM.
The report does not identify the 33 banks or disclose the individual amounts of the penalties.
The regulatory action came amid pressure on lenders to pass reductions in the Central Bank Rate (CBR) on to borrowers through lower lending costs. Between August 2024 and August 2025, the CBR was reduced from 13 per cent to 9.5 per cent, according to reporting based on CBK data.
CBK subsequently revised the risk-based credit pricing framework. The revised model introduced a common reference rate, with the Kenya Shilling Overnight Interbank Average (KESONIA) serving as the reference rate for new variable-rate loans, while the CBR can be used where KESONIA is not practical.
The revised RBCPM took effect for new variable-rate loans from September 1, 2025, while existing variable-rate loans were required to transition by February 28, 2026.
The CBK report also shows that regulatory breaches extended beyond loan pricing. Overall, 35 of Kenya’s 38 commercial banks were found to have violated provisions of the Banking Act or CBK Prudential Guidelines as of December 31, 2025, compared with 11 banks a year earlier.
Other violations included breaches of the single obligor limit, insider lending requirements and minimum capital requirements.
The CBK’s latest findings highlight the regulator’s increased scrutiny of how banks price credit and comply with prudential requirements, as Kenya’s banking sector adjusts to the revised loan-pricing framework.
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Written by Anne Moses
Reporter and staff writer at Getembe News.
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