Nairobi — The Central Bank of Kenya (CBK) has licensed Dubai Islamic Bank after the bank fulfilled its stipulated requirements.
The move comes even as the regulator is yet to lift the moratorium it had imposed on the licensing of new banks.
Dubai Islamic Bank Kenya intends to exclusively offer Shariah compliant banking services becoming the third fully Shariah compliant bank to be licensed in Kenya, after Gulf African Bank limited in 2007 and First Community Bank Limited in 2008.
Earlier, CBK had stated its intention to finalise the processing of licence applications for two institutions that had been granted an 'approval in principle', as a first step to lifting the moratorium on licensing of new commercial banks.
"Accordingly, DIB Bank Kenya Limited (in formation) and Mayfair Bank Limited (in formation) will take the remaining steps to finalise their license applications," CBK has earlier stated.
The decision is seen to highlight the CBK's confidence in the stability of the banking sector, which has been experiencing turbulence in the past couple of years, causing the collapse of three lenders in a row.
DIB is a fully owned subsidiary of Dubai Islamic Bank PJSC (DIB PJSC) of the United Arab Emirates (UAE) founded in 1975 is the first bank to have incorporated the principles of Islam in all its practices and is the largest Islamic Bank in the UAE.
DIB PJSC as at September 2016 had an asset base of Sh4.8 trillion and capital of Sh754.8 billion.
It has a presence in Bosnia, Indonesia, Pakistan, Sudan, Turkey and UAE.
"CBK welcomes the entry of international brands such as DIB into the Kenyan banking sector. DIBs entry will expand the offerings in the market, particularly in the nascent Shariah compliant banking niche," CBK says.