Regulatory Alerts2021-06-01
Added · Updated
Frequently Asked Questions on Risk Based Premium Model for Kenyan Banks
The Kenya Deposit Insurance Corporation (KDIC) introduces a Risk-Based Premium Model requiring banks to pay annual premiums calculated according to their individual risk profiles. The system replaces flat rates with differential pricing to incentivize sound risk management, ensuring that higher-risk institutions pay more while low-risk banks are rewarded with lower costs. Implemented starting July 1, 2021, the model maintains a KES 500,000 depositor coverage limit and is designed to reduce bank failures and instill market discipline.
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