Kenya gives central bank powers to rescue banks during financial crises

Kenya has established a framework allowing its central bank to provide emergency funding to banks during financial crises. 

On Monday, President William Ruto signed the Central Bank of Kenya (Amendment) Bill, 2026, into law, introducing reforms that set out how Kenya will respond to future banking crises by establishing rules for emergency support to lenders and expanding the central bank’s role in preserving financial stability. 

Under the law, the CBK may provide emergency liquidity assistance where it considers intervention necessary to preserve financial stability. Eligible institutions must be solvent and viable, not under liquidation, and considered systemically important or likely to pose risks to the wider financial system if they fail. 

The support will be discretionary, temporary, and subject to conditions set by the central bank. Loans and advances issued under the framework will be repaid over up to 12 months, although the regulator may extend the period. The facilities must also be backed by collateral acceptable to the central bank and subject to valuation, margin, and risk management requirements.

“Emergency liquidity assistance shall only be provided to an institution that is solvent and viable and whose failure may threaten the stability of the financial system,” part of the bill reads. 

The amendments also revise the central bank’s statutory objectives, requiring it to promote the liquidity, solvency, proper functioning, and integrity of a market-based financial system as well as the soundness, safety, and effective regulation of the banking sector.

Another provision expands the range of reserve assets the central bank may buy, sell, import, export, transfer, hold, and refine. Beyond gold and foreign exchange, the law permits the regulator to deal in gold coins, bullion, silver, platinum, and other precious metals under terms it determines.

The legislation also authorises the central bank to provide training and capacity building to its staff, public institutions, members of the public, and institutions from other jurisdictions. CBK may issue regulations to support these programmes.

The law further updates the approval process for CBK deputy governors by replacing references to Parliament with the National Assembly, bringing the Act in line with the 2010 Constitution. 

The amendments are the latest in a series of updates to the Central Bank of Kenya Act, which was enacted in 1966. Recent changes expanded the regulator’s oversight of digital lenders in 2021 and non-deposit-taking credit providers in 2026, while the latest reforms strengthen the central bank’s role in crisis management and financial stability 

The reforms are intended to “strengthen the CBK’s capacity to safeguard financial stability, improve banking oversight, and modernise the country’s monetary policy framework,” Ruto said in a statement on Monday. 

True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders and individuals rewiring Africa’s technical frameworks.

Get 20% off Early Bird tickets for a limited time.