The Central Bank of Kenya (Amendment) Bill, 2026
Status Timeline
Proposed
Done ยท 14 Sep 2026
Public Review
Done
Debate
Done
Executive
Done
Enacted
Active now
New Emergency Liquidity Assistance Framework
Repeals and replaces Section 36 of Cap. 491. Under the new terms:
- The Central Bank of Kenya (CBK) may grant emergency liquidity assistance to banks or microfinance institutions for up to 12 months, with options for extension.
- Recipient institutions must meet CBK criteria for solvency and viability, must not be subject to liquidation, and must be assessed as systemically important.
- All emergency loans must be fully secured by collateral acceptable to the CBK, subject to strict valuation, margin, and risk management requirements.
National Assembly Approval for Deputy Governors
Amends Section 13B of the Act to require the approval of the National Assembly, rather than Parliament, for nominees to the position of Deputy Governor. This aligns the approval process of Deputy Governors with that of the Governor.
Authorisation to Deal in Precious Metals
Amends Section 27 to clarify that the CBK may buy, sell, import, export, transfer, hold, refine, or otherwise deal in gold, gold coins, bullion, silver, platinum, or other precious metals as part of its reserve and market operations.
Loans to the Kenya Deposit Insurance Corporation
Repeals and replaces Section 46A to change references from the defunct 'Deposit Protection Fund Board' to the 'Kenya Deposit Insurance Corporation'. It authorises the CBK to grant loans or advances to the Corporation for fixed periods not exceeding three years, secured by Treasury Bills or other specified Government securities.
Bill No.
National Assembly Bills No. 27 of 2026
Gazette No.
Supplement No. 122 of 2026
Sponsor
Kuria Kimani
Background
The Central Bank of Kenya (Amendment) Bill, 2026 seeks to amend the Central Bank of Kenya Act (Cap. 491) to clarify the statutory boundaries of the CBK's intervention powers. By distinguishing routine monetary policy operations from emergency liquidity assistance, the Bill aims to promote market discipline, reduce moral hazard, and provide legal certainty during periods of financial stress. It also updates governance provisions and institutional terminology to align with the current constitutional framework.
Key Amendments
- Mandate of the Bank (Section 4 & 4A): Amends Section 4(2) to focus the Bank's objective on promoting and fostering the liquidity, solvency, proper functioning, and integrity of a market-based financial system. It also inserts Section 4A(1)(i) to mandate the Bank to provide training and capacity building to its staff, the general public, government institutions, and foreign jurisdictions.
- Appointment of Deputy Governors (Section 13B): Amends Section 13B(1) to transfer the approval authority for nominated Deputy Governors from Parliament to the National Assembly.
- Dealing in Precious Metals (Section 27): Replaces Section 27(1) to explicitly allow the Bank to buy, sell, import, export, transfer, hold, refine, or deal in gold, gold coins, bullion, silver, platinum, or other precious metals under terms determined by the Bank.
- Emergency Liquidity Assistance (Section 36): Establishes a structured emergency lending regime. Loans are capped at 12 months (subject to extension) and are limited to solvent, viable, non-liquidating, and systemically important banks or microfinance institutions.
- Kenya Deposit Insurance Corporation (Section 46A): Formally replaces the defunct 'Deposit Protection Fund Board' with the 'Kenya Deposit Insurance Corporation' (KDIC) and permits secured loans to the KDIC for up to three years.
New Obligations
- Collateral and Solvency Compliance: Banks and microfinance institutions seeking emergency liquidity assistance must satisfy strict solvency and viability tests. They are obligated to provide collateral acceptable to the CBK, which will be subject to CBK-determined valuation, margin, and risk management assessments.
Gazettement
The Central Bank of Kenya (Amendment) Bill, 2026 was published in Kenya Gazette No. 122.
First Reading
The Bill was read a First Time in the National Assembly.
Second Reading
The Bill was read a Second Time in the National Assembly and debated.
Committee of the Whole House
The Bill was considered clause-by-clause in the Committee of the Whole House.
Third Reading
The Bill was read a Third Time and passed by the National Assembly.
Presidential Assent
The Bill was assented to by the President, enacting it into law.