Kenya - Apply For a Licence to Start a Commercial Bank

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Procedure

Apply in Person

1. Contact the Central Bank of Kenya at an early stage for a preliminary meeting to discuss CBK licensing requirements and related issues
   
2. Seek CBK’s approval for the use of the word “bank’’ or “finance” in the proposed name
   
3. Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name.
   

   • The name a search and reservation takes one day to complete and a fee of Ksh.1000 is charged for the process.
     

4. After the name has been approved by the Central Bank, you should proceeded to the Registrar of Companies for incorporation of the proposed bank as a limited liability company.
   
5. Upon incorporation of the Limited Liability Company, apply to CBK for a Commercial Bank License.
   
6. At this stage you should contact the Bank Supervision Department at CBK or download and complete the following application forms which can be accessed from the Central Bank Website.
   

   (i). Application form for a License to Conduct the Business of an Institution - Form CBK IF 1-1
   

   (ii). “Fit and Proper” forms for proposed directors and Chief Executive Officer - Form CBK IF 1-2
   

   (iii). “Fit and Proper” forms for all significant shareholders - Form CBK IF 1-3
   

7. The duly completed application form, Form CBK IF 1-1 , should be forwarded together with the support documentation below:
   

   (i). Certified copy of the certificate of incorporation of the institution.
   

   (ii). Certified copy of the Memorandum and Articles of Association of the proposed institution.
   

   (iii). Certified copy of the Memorandum and Articles of Association of any corporate body that proposes to have a significant shareholding in the institution.
   

   (iv). Certified copy of the latest audited financial statements for each of the three years immediately preceding the date of the application if the applicant has been operating in any sector under any name and laws or in cases where any of the shareholders is a corporate body.
   

   (v). Where the proposed significant shareholders are natural persons, certified personal statements of affairs for the past three years should be submitted.
   

8. All applications should be submitted together with a non-refundable application fee), payable by banker’s cheque in favour of the Central Bank of Kenya or such other mode of payment as the CBK may prescribe, as specified under the Fourth Schedule to the Banking Act,(The Banking (Fees) Regulations. The application fee is currently Kshs 5,000.
   
9. In case of an institution incorporated outside Kenya, in addition to notarized copies of the documents specified above, the following should also be submitted:
   

   (a). A notarized copy of the signed minutes of the board of the institution or other prime oversight body passing the resolution to establish a branch or subsidiary in Kenya,
   

   (b). An undertaking by the board or other oversight body to maintain minimum assigned capital in the proposed branch or subsidiary in Kenya as per the Banking Act and that such capital shall be in Kenya shillings,
   

   (c). The name and contact details of a designated person(s) from the Head Office authorized to liaise with the Central Bank on the application on behalf of the institution.
   

   (d). A letter of no objection from the home supervisory authority recommending the applicant to establish a branch or subsidiary in Kenya should be obtained. The letter should be forwarded directly to the Director, Bank Supervision Department, Central Bank of Kenya, P.O. Box 60000-00200, Nairobi.
   

   (e). There shall be an understanding that the home country supervisor will exchange supervisory information with the Central Bank of Kenya.
   

   (f). Confirmation from the home country supervisor that the promoters of the foreign incorporated bank do not operate a shell bank should be obtained.
   

   (g). Where necessary, confirmation from the home supervisor that the supervisor conducts consolidated supervision.
   

   (h). Sworn declarations signed by every officer as specified in the application forms.
   

10. A feasibility study of the future operations and development of the intended business of the bank for a minimum period of three years from the date of the application should also be submitted.
    
11. The applicant should also provide sources and evidence of availability of capital .Currently a minimum capital of Kshs 1 billion is required to start a commercial bank company.
    
12. Every proposed individual and institutional shareholder should submit, as part of the sworn declaration in the “Fit and Proper” - Form CBK IF 1-3, a statement to the effect that the proposed capital is not from proceeds of crime or illicit activities.
    
13. Upon meeting all the requirements, the Central Bank will grant the applicant an approval in principle to conduct the business of a Commercial bank.
    
14. With this approval, the applicants may proceed to obtain premises, Information Technology Systems, put in place other necessary operating facilities and recruit staff for the institution.
    
15. Once the applicants are ready with their premises and systems, they should then invite the Central Bank to conduct an inspection.
    
16. If the inspection is satisfactory, and prior to issuance of the license, applicants are required to pay the prescribed annual license fees. The prescribed annual license fees are payable in full for the year during which the license is initially issued, and shall not be prorated for validity periods less than 12 months.
    
17. Once the requisite license fees have been paid, the Central Bank places a notice in the Kenya Gazette to formally specify the institution.
    
18. A license is then issued and the newly licensed institution can open its doors to the public.
    
    

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Required Documents

1. Duly filled prescribed application forms
   
2. Certified copy of the certificate of incorporation of the institution.
   
3. Certified copy of the Memorandum and Articles of Association of the proposed institution.
   
4. Certified copy of the Memorandum and Articles of Association of any corporate body that proposes to have a significant shareholding in the institution.
   
5. Certified copy of the latest audited financial statements for each of the three years immediately preceding the date of the application if the applicant has been operating in any sector under any name and laws or in cases where any of the shareholders is a corporate body.
   
6. Where the proposed significant shareholders are natural persons, certified personal statements of affairs for the past three years should be submitted.
   
   

Office Locations & Contacts

Central Bank of Kenya - Head Office
Haile Selassie Avenue
P.O Box 60000 – 00200,
Nairobi, Kenya
Tel / Fax: +254 20 286 0000
Phone: +254 20 286 1000, +254 20 286 3000, +254 709 081 000, +254 709 083 000
Email: [email protected]
CBK Contact Details

Eligibility

• Any person is eligible to make an application to run a CRB Cooperative Bank in Kenya.
  
• This application allows a person to operate a Cooperative Bank in Kenya.
  
• In Kenya no person shall, operate a Cooperative Bank in Kenya unless authorized by the Central Bank of Kenya.
  
  

Fees

• The name a search and reservation fee of Ksh.1000
  
• Application fee is Ksh. 5,000 for a new licence (fees are in bankers cheque payable to the Central Bank of Kenya);
  
• The licence fee of Ksh. 100,000
  
  

Validity

• The validity period is one year.
  
• A licence issued under this section shall, unless earlier revoked, expire on the 31st December next following the date of issue
  
  

Documents to Use

• Application form for a License to Conduct the Business of an Institution - Form CBK IF 1-1
  
• “Fit and Proper” forms for proposed directors and Chief Executive Officer - Form CBK IF 1-2
  
• “Fit and Proper” forms for all significant shareholders - Form CBK IF 1-3
  
  

Sample Documents

Please attach sample completed documents that would help other people.

Processing Time

• The processing time is 120 days.
  
  

Related Videos

Videos explaining the procedure or to fill the applications. 
Attach videos using the following tag <&video type='website'>video ID|width|height<&/video&> from external websites. 	
Please remove the '&' inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver, 
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url 'http://www.youtube.com/watch?v=Y0US7oR_t3M' Video ID is 'Y0US7oR_t3M'.

Instructions

• For issuance of a license, please submit the duly completed form, to the CBK
  
• For purposes of application for a new license, an applicant is required first to seek approval name from the Central Bank of Kenya and thereafter will be advised on the documents to be submitted together with the duly completed form.
  
• Upon satisfying all the requirements and paying the applicable licensing fees the applicant will be issued with a license.
  
• All information provided shall be treated as confidential.
  
  

Required Information

1. Name of applicant
   
2. Head/ Main office
   
3. Physical and postal address of head office/ proposed new outlet
   
4. Date of incorporation
   
5. Form of incorporation
   
6. Description of the applicants business or functions
   
7. Certificate of incorporation Number
   
8. Details of subsidiaries and affiliates (Name of Outlet, County, City/Town, Street, Building, Date opened)
   
9. Particulars of shareholders (Name, Nationality, Date of acquisition, Amount of shareholding, % of shareholding)
   
10. Particulars of directors (Name, Nationality, Date of appointment, Level of education)
    
11. Particulars of the officers in the order of seniority (Name, Designation, Nationality, Date of appointment)
    
12. Ownership profiles
    
13. Shareholding in any other financial institution
    
14. Name of applicants external auditors
    
15. Declaration
    
    

Need for the Document

• This license allows the holders to operate a Commercial Bank in Kenya.
  
• A person who operates a Commercial Bank without a valid license commits an offence and shall, on conviction be liable to a fine not exceeding five hundred thousand shillings, or to imprisonment for term not exceeding three years, or to both.
  
  

Information which might help

• The Bank shall be body corporate with perpetual succession and a common seal, with power to acquire, own, possess and dispose of property, to contract, and to sue and to be sued in its own name.
  
  

Other uses of the Document/Certificate

Please explain what are other uses of obtaining this document/certificate.
e.g. Birth Certificate can be used as proof of identity.

External Links

• The Central Bank of Kenya Act
  
  

Others

More information which might help people.