The apex bank said in a statement issued in the Kenyan capital of Nairobi that the ban, which has been in place since November 2015, was imposed against the backdrop of operational challenges in the sector.

"It was intended to provide space for the strengthening of the Kenyan banking sector. Since then, significant strides have been made in strengthening the legal framework for Kenya’s banking sector," the CBK said.

Since the moratorium was placed, there have been about 10 mergers and acquisitions by existing players and the entry of foreign strategic investors.

The CBK said its recent increase in minimum core capital requirement for commercial banks to 10 billion Kenyan shillings (about 77.2 million U.S. dollars) will further strengthen the sector.

It added that stronger and more resilient banks will be able to navigate the growing risks in global, regional, and domestic arenas, and support large-scale financing needs to meet Kenya’s development operations.

The Central Bank of Kenya (CBK) said on Wednesday that it has lifted a nearly decade-long ban on the establishment of new commercial banks in the East African country, effective July 1.