Banking Act

Section 1. Short title Section This Act may be cited as the Banking Act.

Section 2. Interpretation Section 2(1) In this Act, unless the context otherwise requires— "agency" means an entity contracted by an institution ("a bank or financial institution or a mortgage finance company;") and approved by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") or sub-contracted by such entity to provide the services of the institution ("a bank or financial institution or a mortgage finance company;") on behalf of the institution ("a bank or financial institution or a mortgage finance company;") , in such manner as may be prescribed by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") : Provided that where such entity is a co-operative society, prior approval to provide the services shall be sought from the Sacco Societies Regulatory Authority established under the SACCO Societies Act ( Cap. 490B ); "assigned capital" has the meaning given to it in section 7 (4); "bank" means a company which carries on, or proposes to carry on, banking business in Kenya but does not include the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; "bank...

Section 3. Restrictions on carrying onbanking business,etc. Section 3(1)(a) transact any banking business or financial business or the business of a mortgage finance company unless it is an institution ("a bank or financial institution or a mortgage finance company;") or a duly approved agency ("an entity contracted by an institution and approved by the Central Bank or sub-contracted by such entity to provide the services of the institution on behalf of the institution, in such manner as may be prescribed by the Central Bank:") conducting banking business on behalf of an institution ("a bank or financial institution or a mortgage finance company;") which holds a valid licence ("a licence granted under;") ; Section 3(1)(b) unless it is a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") and has obtained the consent of the Central Bank, use the word " bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") " or any of its derivatives or any other word indicating the transaction of banking business , or the equivalent of the foregoing in any...

Section 4. Application forlicence Section 4(1) Every institution ("a bank or financial institution or a mortgage finance company;") intending to transact banking business , financial business or the business of a mortgage finance company in Kenya shall, before commencing such business, apply in writing to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") for a licence ("a licence granted under;") . Section 4(2) Deleted by ActNo. 9 of 2006, s. 4(b). Section 4(3) The Central Bank shall, where it is satisfied as to the professional and moral suitability of persons proposed to manage or control the institution ("a bank or financial institution or a mortgage finance company;") , certify that such persons are fit and proper persons to manage or control the institution ("a bank or financial institution or a mortgage finance company;") . Section 4(4) For the purposes of this section, the criteria for assessing the professional or moral suitability of persons proposed to manage or control an institution ("a bank or financial institution or a mortgage finance company;") shall be as prescribed in the First Schedule. Section 4(5)(a) the financial c...

Section 5. Licensing of institutions Section 5(1) Subject to section 4 , the Central Bank may, upon payment of the prescribed fee, grant a licence to an institution to carry on business. Section 5(2) The Central Bank may endorse on a licence ("a licence granted under;") granted under this section such conditions as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") considers necessary and may from time to time add, vary or substitute such conditions as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") deems appropriate. Section 5(2A) An institution ("a bank or financial institution or a mortgage finance company;") which fails to commence business in Kenya within twelve months of the grant of a licence ("a licence granted under;") under this section shall, if it still proposes to transact business in Kenya, make fresh application under section 4 . Section 5(3) A licence ("a licence granted under;") issued under this section shall remain valid unless revoked under section 6 : Provided that a licence ("a licence granted under;") which was in force on the date of commencement of this subsection s...

Section 6. Revocation oflicence Section 6(1)(a) ceases to carry on business in Kenya or goes into liquidation or is wound up or is otherwise dissolved; or Section 6(1)(b) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , before revoking a licence ("a licence granted under;") , shall give to the institution ("a bank or financial institution or a mortgage finance company;") not less than twenty-eight days’ notice in writing of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ’s intention, and shall consider any representations made to the Central Bank in writing by the institution ("a bank or financial institution or a mortgage finance company;") within that period before revoking the licence ("a licence granted under;") ; Section 6(1)(b)(i) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , before revoking a licence ("a licence granted under;") , shall give to the institution ("a bank or financial institution or a mortgage finance company;") not less than twenty-eight days’ notice in writing of the Central Bank ("the Central Bank of Kenya esta...

Section 7. Minimumcapitalrequirements Section 7(1) A licence ("a licence granted under;") shall not be granted to an institution ("a bank or financial institution or a mortgage finance company;") unless the institution ("a bank or financial institution or a mortgage finance company;") meets the minimum capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") requirements specified in the Second Schedule. Section 7(2) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may, by order published in the Gazette , amend the Second Schedule. Section 7(3) Every order made under subsection (2) shall be laid before the National Assembly without unreasonable delay, and unless a resolution approving the order is passed by the National Assembly within twenty days on which it next sits after the order is so laid, it shall thenceforth be void, but without prejudice to anything previously done thereunder or to the issuing of a new order. Section 7(4) The board of management or other controlling authority of an institution ("a bank or financial institution or a mortgage finance c...

Section 8. Location of places of business Section 8(1) No institution ("a bank or financial institution or a mortgage finance company;") shall open in Kenya a branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") or a new place of business ("any premises, other than the head office, including a branch, an agency or a mobile unit, or such other premises as may, from time to time, be prescribed by the Central Bank, at which an institution transacts banking or financial business and which is open to the public;") or change the location of a branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") or an existing place of business ("any premises, other than the head office, including a branch, an agency or a mobile unit, or such other premises as may, from time to time, be prescribed by the Central Bank, at which an institution transacts banking or financial business and which is open to the public;") in Kenya without the approval of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 8(2)(a)...

Section 9. Amalgamations and transfers of assets and liabilities Section 9(1) No amalgamation or arrangement which involves an institution ("a bank or financial institution or a mortgage finance company;") as one of the principal parties to the relevant transaction, and no arrangement for the transfer of all or any part of the assets and liabilities of an institution ("a bank or financial institution or a mortgage finance company;") to another person, shall have legal force except with the prior written approval of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") . Section 9(2)(a) he is satisfied that the transaction in question will not be detrimental to the public interest; Section 9(2)(b) in the case of an amalgamation, the amalgamation is of institutions only; or Section 9(2)(c) in the case of a transfer of assets and liabilities which entails the transfer by the transferor institution ("a bank or financial institution or a mortgage finance company;") of the whole or any part of its business as an institution ("a bank or financial institution or a mortgage finance company;") , such transfer is effected to another in...

Section 8A. Branches and subsidiaries Section 8A(1) No institution ("a bank or financial institution or a mortgage finance company;") shall open a branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") or establish a subsidiary outside Kenya, except with the prior approval of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") . Section 8A(2) An institution ("a bank or financial institution or a mortgage finance company;") seeking approval under subsection (1) shall apply, in writing, to the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") through the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 8A(3)(a) the history and financial condition of the institution ("a bank or financial institution or a mortgage finance company;") ; Section 8A(3)(b) the adequacy of the institution ("a bank or financial institution or a mortgage finance company;") ’s capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its...

Section 9A. Directors, Chief Executive Officers and significant shareholders to be fit and proper persons Section 9A(1) An institution ("a bank or financial institution or a mortgage finance company;") shall ensure that no person is appointed or elected as a director or appointed as a senior officer unless the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") has certified the person as a fit and proper person to manage or control the institution ("a bank or financial institution or a mortgage finance company;") . Section 9A(2) A person shall ensure that the person does not become a significant shareholder of an institution ("a bank or financial institution or a mortgage finance company;") unless the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") has certified the person as a fit and proper person to manage or control the institution ("a bank or financial institution or a mortgage finance company;") . Section 9A(3)(a) when the shareholder initially becomes a significant shareholder after the commencement of this section; Section 9A(3)(b) when a new institution ("a bank or financial institution or...

Section 10. Limit on advances, credits and guarantees Section 10(1) An institution ("a bank or financial institution or a mortgage finance company;") shall not in Kenya grant to any person or permit to be outstanding any advance or credit facility or give any financial guarantee or incur any other liability on behalf of any person, so that the total value of the advances, credit facilities, financial guarantees and other liabilities in respect of that person at any time exceed twenty-five per cent of its core capital ("permanent shareholders’ equity in the form of issued and fully paid-up shares of common stock, or in the case of foreign incorporated banks, of the assigned capital, plus all disclosed reserves, less goodwill or any other intangible assets;") : Provided that the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may authorize a mortgage finance company to permit the total value of the advances, credit facilities, financial guarantees or other liabilities in respect of any such person at any time to exceed twenty-five per centum of its capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya,...

Section 11. Restrictions on advances, credits and guarantees Section 11(1)(a) grant or permit to be outstanding any advance or credit facility against the security of its own shares; or Section 11(1)(b) grant or permit to be outstanding any advance or credit facility or give any financial guarantee or incur any other liability to, or in favour of, or on behalf of, any company (other than another institution ("a bank or financial institution or a mortgage finance company;") ) in which the institution ("a bank or financial institution or a mortgage finance company;") holds, directly or indirectly, or otherwise has a beneficial interest in, more than twenty-five percent of the share capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") of that company; or Section 11(1)(c) grant or permit to be outstanding any unsecured advances in respect of any of its employees or their associates; or Section 11(1)(d) to any of its officers or significant shareholders or their associates; or Section 11(1)(d)(i) to any of its officers or significant shareholders or their associates; or Section 11(1)(d)(ii) to any person of whom or of whic...

Section 12. Restriction on trading and investments Section engage, alone or with others, in wholesale or retail trade, including the import or export trade, except in the course of the satisfaction of debts due to it; and any trading interest carried on by an institution ("a bank or financial institution or a mortgage finance company;") at the commencement of this Act shall be disposed of by the institution ("a bank or financial institution or a mortgage finance company;") within such time as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may allow;

Section 13. Restrictions on ownership of sharecapitalof aninstitution Section 13(1)(a) another institution ("a bank or financial institution or a mortgage finance company;") ; Section 13(1)(b) the Government of Kenya or the Government of a foreign sovereign State; Section 13(1)(c) a State corporation within the meaning of the State Corporations Act ( Cap. 446 ); Section 13(1)(d) a foreign company which is licensed to carry on the business of an institution ("a bank or financial institution or a mortgage finance company;") in its country of incorporation; or Section 13(1)(e) a non-operating holding company approved by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 13(1A) For the purposes of subsection (1) , reference to "person" shall include a reference to that person's associates. Section 13(2) No financial institution ("a company, other than a bank, which carries on, or proposes to carry on,financial business and includes any other company which the Cabinet Secretary may, by notice in the, declare to be a financial institution for the purposes of this Act;") or mortgage finance company shall acquire or hold, directly or i...

Section 14. Restrictions on advances for purchase ofland Section 14(1) No institution ("a bank or financial institution or a mortgage finance company;") , other than a mortgage finance company , shall make loans or advances for the purchase, improvement or alteration of land ("freehold and leasehold land in Kenya and all buildings and permanent improvements thereon;") , so that the aggregate amount of those loans or advances exceeds forty percent of the amount of its total deposit liabilities ("the total deposits in or outside Kenya in any institution which are repayable on demand or after a fixed period or after notice;") . Section 14(2) The Central Bank may authorize an institution ("a bank or financial institution or a mortgage finance company;") to exceed the percentage specified in subsection (1) up to a maximum of seventy per cent. Section 14(3) The provisions of this section shall not prevent an institution ("a bank or financial institution or a mortgage finance company;") accepting a security over land ("freehold and leasehold land in Kenya and all buildings and permanent improvements thereon;") for a loan or advance made in good faith for any other purpose.

Section 15. Mortgage finance companies Section 15(1)(a) for the purpose of the acquisition, construction, improvement, development, alteration or adaptation for a particular purpose of land ("freehold and leasehold land in Kenya and all buildings and permanent improvements thereon;") in Kenya; and Section 15(1)(b) the repayment of which, with interest and other charges, is secured by first mortgage or charge over land ("freehold and leasehold land in Kenya and all buildings and permanent improvements thereon;") with or without additional security or personal or other guarantees. Section 15(2) Subject to this Act, a mortgage finance company may grant other types of credit facilities against securities other than land ("freehold and leasehold land in Kenya and all buildings and permanent improvements thereon;") and may engage in other prudent investment activities. Section 15(3) Deleted by ActNo. 7 of 2001, s. 3. Section 15(4) Deleted by ActNo. 7 of 2001, s. 3.

Section 16. Restrictions on deposit-taking Section 16(1) Subject to this section, no person, other than an institution ("a bank or financial institution or a mortgage finance company;") which holds a valid licence ("a licence granted under;") or a duly approved agency ("an entity contracted by an institution and approved by the Central Bank or sub-contracted by such entity to provide the services of the institution on behalf of the institution, in such manner as may be prescribed by the Central Bank:") conducting banking business on behalf of an institution ("a bank or financial institution or a mortgage finance company;") , shall invite or accept deposits in the course of carrying on a deposit-taking business. Section 16(2)(a) under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it; and Section 16(2)(b) which are not referable to the provision of property or services or the giving of security. Section 16(3)(a) it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services...

Section 16A. Imposition of charges and payment of interest Section 16A(1) No institution ("a bank or financial institution or a mortgage finance company;") shall impose any form of charges on a savings, seven day call or fixed deposits account. Section 16A(2) An institution ("a bank or financial institution or a mortgage finance company;") shall, in respect of a savings account, pay interest accruing or a return in the case of an institution ("a bank or financial institution or a mortgage finance company;") carrying out business in accordance with Islamic law to that account as long as the minimum balance is maintained. Section 16A(3) An institution ("a bank or financial institution or a mortgage finance company;") shall, in respect of a seven day call or fixed deposit account, pay interest accruing to the account on agreed contractual terms: Provided that such interest may be forfeited where the deposit is uplifted before the maturity date. [Act No. 9 of 2006 , s. 12, Act No. 8 of 2008 , s. 67.]

Section 17. Ratio betweencore capitaland deposits Section The core capital ("permanent shareholders’ equity in the form of issued and fully paid-up shares of common stock, or in the case of foreign incorporated banks, of the assigned capital, plus all disclosed reserves, less goodwill or any other intangible assets;") of an institution ("a bank or financial institution or a mortgage finance company;") shall at all times be not less than eight per cent of its total deposit liabilities ("the total deposits in or outside Kenya in any institution which are repayable on demand or after a fixed period or after notice;") . [Act No. 4 of 1999 , s. 82.]

Section 18. Ratio betweencapitaland assets Section 18(1) The Central Bank may prescribe the minimum ratios which shall be maintained by institutions and banking groups as between their core capital ("permanent shareholders’ equity in the form of issued and fully paid-up shares of common stock, or in the case of foreign incorporated banks, of the assigned capital, plus all disclosed reserves, less goodwill or any other intangible assets;") and total capital ("the total sum of core capital and supplementary capital;") on one hand and their risk-weighted assets (including their total loans and advances) and risk-weighted off balance sheet items on the other and for that purpose, may also determine the method of classifying and evaluating assets: Provided that the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may prescribe higher minimum ratios based on its assessment of an institution ("a bank or financial institution or a mortgage finance company;") ’s or banking group ("a licensed institution and its subsidiaries, non-operating holding companies and subsidiaries of its non-operating holding companies;") ’s risk profile. Section 18(2) A n...

Section 19. Minimum liquid assets Section 19(1) An institution ("a bank or financial institution or a mortgage finance company;") shall maintain such minimum holding of liquid assets as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may from time to time determine. Section 19(2)(a) notes and coins which are legal tender in Kenya; Section 19(2)(b) balances held at the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 19(2)(c) balances at other banks in Kenya after deducting therefrom balances owed to those other banks; Section 19(2)(d) balances at banks abroad withdrawable on demand or short notice and money at call abroad after deducting therefrom balances owed to banks abroad where the balances and money at call and short notice are denominated in convertible currencies; and for the purposes of this paragraph " bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") abroad" means a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") outside...

Section 20. Restrictions on dividends Section 20(1) No institution ("a bank or financial institution or a mortgage finance company;") incorporated in Kenya shall pay any dividend on its shares or make any other form of distribution to its shareholders until all its capitalized expenditure (including preliminary expenses, share-selling commission, brokerage, amount of losses incurred and items of expenditure not represented by tangible assets) has been written off and provision has been made for loans, advances and other assets in accordance with subsection (2) . Section 20(2)(a) make provision for loans, advances and other assets before any profit or loss is declared; and Section 20(2)(b) ensure that the provision for loans, advances and other assets made under paragraph (a) is adequate according to such guidelines as may be prescribed by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") .

Section 43. Representative offices of foreign institutions Section 43(1) The Central Bank may, in writing and subject to such conditions as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may consider necessary, authorize a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") or a financial institution ("a company, other than a bank, which carries on, or proposes to carry on,financial business and includes any other company which the Cabinet Secretary may, by notice in the, declare to be a financial institution for the purposes of this Act;") incorporated outside Kenya which does not propose to transact banking or financial business in Kenya but which proposes and applies in writing to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") to establish a representative office ("an office established in Kenya under the provision of Part IX;") in Kenya, to open an office in a place in Kenya approved by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 43(2) The Central...

Section 21. Form of accounts Section 21(1) All entries in any books and all accounts kept by an institution ("a bank or financial institution or a mortgage finance company;") shall be recorded and kept in the English language, using the system of numerals employed in Government accounts. Section 21(2) The Central Bank may, at any time, issue directions to an institution ("a bank or financial institution or a mortgage finance company;") requiring it to maintain such books, records or information, in addition to any books, records or information then already maintained by it, as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may consider to be necessary. Section 21(3) The financial statements shall be in accordance with international financial reporting standards, including applicable consolidated accounting principles for groups. Section 21(4) The Central Bank may, for regulatory purposes, require an additional accounting consolidation which excludes insurance and such other subsidiaries as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may prescribe. [Act No. 57 of 2012 , s. 43.]

Section 22. Accounts to be exhibited Section 22(1)(a) exhibit throughout the year in a conspicuous position in every office and branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") in Kenya’ a copy of its last audited financial statements which shall be in conformity with the minimum financial disclosure requirements prescribed from time to time by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") together with the full and correct names of all persons who are officers of the institution ("a bank or financial institution or a mortgage finance company;") in Kenya; and Section 22(1)(b) within three months of the end of each financial year ("the financial year prescribed in;") , cause a copy of the balance sheet and last audited income statements for that financial year ("the financial year prescribed in;") to be published in a newspaper with wide circulation. Section 22(2) The financial statements shall be in keeping with international financial reporting standards, including applicable consolidated accounting principles for groups. [Act No. 13 of 1994 , s. 9, Act N...

Section 23. Submission of accounts tothe Central Bank Section 23(1) An institution ("a bank or financial institution or a mortgage finance company;") shall, not later than three months after the end of its financial year ("the financial year prescribed in;") , submit to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") an audited balance sheet, showing its assets and liabilities in Kenya, and an audited profit and loss account covering its activities in Kenya together with a copy of the auditor’s report, in the prescribed form. Section 23(2) An institution ("a bank or financial institution or a mortgage finance company;") which is incorporated outside Kenya, and an institution ("a bank or financial institution or a mortgage finance company;") which is incorporated in Kenya and maintains subsidiaries or branches outside Kenya, shall submit to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , with the balance sheet and accounts referred to in subsection (1) , an audited balance sheet and an audited profit and loss account of the institution ("a bank or financial institution or a mortgage fin...

Section 24. Appointment of auditors Section 24(1) Subject to subsection (7) , every institution ("a bank or financial institution or a mortgage finance company;") shall appoint annually an auditor (within the meaning of section 3(1) of the Companies Act ( Cap. 486 )) and approved by the Central Bank. Section 24(1A) An auditor appointed under subsection (1) shall audit and report on the annual balance sheet and profit and loss account required to be submitted to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") in accordance with section 23 (1). Section 24(2) If an institution ("a bank or financial institution or a mortgage finance company;") fails to appoint an approved auditor under subsection (1) , or to fill any vacancy for an auditor which may arise, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may appoint an auditor and fix the remuneration to be paid by the institution ("a bank or financial institution or a mortgage finance company;") to him. Section 24(3)(a) to submit such additional information in relation to his audit as the Central Bank ("the Central Bank of Kenya established...

Section 25. Change of auditors to be notified tothe Central Bank Section 25(1) No institution ("a bank or financial institution or a mortgage finance company;") shall remove or change its auditor except with the prior written approval of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 25(2)(a) resigns from office; Section 25(2)(b) does not seek to be re-appointed; or Section 25(2)(c) includes in his report or draft report on the institution ("a bank or financial institution or a mortgage finance company;") ’s accounts any qualification which did not appear in the accounts for the preceding financial year ("the financial year prescribed in;") . Section 25(3) An institution ("a bank or financial institution or a mortgage finance company;") aggrieved by a decision of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under subsection (1) may appeal to the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") within fourteen days. Section 25(4) The decision of the Cabinet Secretary ("the Cabinet Secretary for the time being respons...

Section 26. Auditor’s duty of confidence Section 26(1) No duty to which an auditor of an institution ("a bank or financial institution or a mortgage finance company;") may be subject shall be regarded as contravened by reason of his communicating in good faith to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , whether or not in response to a request made by it, any information or opinion on a matter to which this Part applies and which is relevant to any function of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under this Act. Section 26(2) This section applies to any matter of which an auditor becomes aware in his capacity as an auditor or in the discharge of his duties under this Part and which relates to the business or affairs of the institution ("a bank or financial institution or a mortgage finance company;") or any associate of that institution ("a bank or financial institution or a mortgage finance company;") .

Section 20A. Financial year Section 20A(1) The financial year ("the financial year prescribed in;") of every institution ("a bank or financial institution or a mortgage finance company;") shall be the period of twelve months ending on the 31st December in each year. Section 20A(2) Where the financial year ("the financial year prescribed in;") of an institution ("a bank or financial institution or a mortgage finance company;") is different from that prescribed in this section, the institution ("a bank or financial institution or a mortgage finance company;") shall, within twelve months of the commencement of this section, change its financial year ("the financial year prescribed in;") to comply with the provisions of this section. [Act No. 13 of 1994 , s. 8.]

Section 27. Collection of information by Central Bank Section The Central Bank shall collect such date and other information as may be necessary to enable it to maintain supervision and surveillance of the affairs of institutions or their duly authorised agencies and the protection of their depositors and, for this purpose, may require institutions to submit statistical and other returns on a periodic basis in addition to any other returns required by law. [Act No. 8 of 2009 , s. 57.]

Section 28. Furnishing of information Section 28(1) The Central Bank may require any institution ("a bank or financial institution or a mortgage finance company;") and their agencies to furnish to it, at such time and in such manner as it may direct, such information as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may reasonably require for the proper discharge of its functions under this Act. Section 28(2) The information required to be furnished under subsection (1) may include information relating to any company which is an affiliate, an associate or a non-operating holding company of the institution ("a bank or financial institution or a mortgage finance company;") required to furnish information under that subsection. Section 28(3)(a) the legal, managerial and operational structure of a group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") or banking group ("a licensed institution and its subsidiaries, non-operating holding companies and subsidiaries of its non-operating holding companies;") ; Section 28(3)(b) the risk profile of a group ("a non-operating ho...

Section 29.Cabinet Secretarymay require further information Section The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may require the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") or an institution ("a bank or financial institution or a mortgage finance company;") to furnish to him, at such time and in such manner as he may direct, such information as the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may require. [Act No. 19 of 2015 , s. 79.]

Section 30. Time to furnish information Section Where the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") or an institution ("a bank or financial institution or a mortgage finance company;") is required to furnish information under this Part, it shall furnish that information and any supplemental material that may be required as a result of that information within the period specified in this Part or the relevant direction or within such reasonable period thereafter as may be agreed.

Section 31. Publication of information Section 31(1) The Central Bank or the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may publish in whole or in part, at such times and in such manner as it or he thinks fit, any information furnished to it or him under this Act: Provided that the information so furnished shall not be published if it would disclose the financial affairs of any person, unless the consent in writing of that person has first been given. Section 31(2) Except as provided in this Act, no person shall disclose or publish any information which comes into his possession as a result of the performance of his duties or responsibilities under this Act and, if he does so, he shall, for the purposes of section 49 , be deemed to have contravened the provisions of this Act. Section 31(3)(a) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may disclose any information referred to in subsection (2) , including information on anti-money laundering, counter-terrorism financing and countering proliferation financing to any monetary authority, fiscal or tax agency ("an entity...

Section 31A. Disclosure of information on loans Section A bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") or financial institution ("a company, other than a bank, which carries on, or proposes to carry on,financial business and includes any other company which the Cabinet Secretary may, by notice in the, declare to be a financial institution for the purposes of this Act;") shall, before granting a loan to a borrower disclose all the charges and terms relating to the loan. [Act No. 25 of 2016 , s. 2.]

Section 31B. Information on next of kin Section 31B(1) A bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") or financial institution ("a company, other than a bank, which carries on, or proposes to carry on,financial business and includes any other company which the Cabinet Secretary may, by notice in the, declare to be a financial institution for the purposes of this Act;") licensed under this Act shall, in respect of all accounts operated at the institution ("a bank or financial institution or a mortgage finance company;") , maintain a register containing particulars of the next of kin of all customers operating such accounts, and shall update this register on an annual basis. Section 31B(2) A bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") or financial institution ("a company, other than a bank, which carries on, or proposes to carry on,financial business and includes any other company which the Cabinet Secretary may, by notice in the, declare to be a financial institution for the purposes of this Act;") which contravenes subsec...

Section 32. Inspection of institutions Section 32(1) The Central Bank may, at any time and from time to time, and shall, if so directed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") , cause an inspection to be made by any person authorised by it, in writing, of any institution ("a bank or financial institution or a mortgage finance company;") and its agencies and of their books, accounts and records. Section 32(2)(a) the books, accounts and other documents required to be produced shall not, in the course of the inspection, be removed from the premises of the institution ("a bank or financial institution or a mortgage finance company;") or other premises at which they are produced; Section 32(2)(b) the person making the inspection may make copies of any books, accounts and other documents required for the purposes of his report; and Section 32(2)(c) all information obtained in the course of the inspection shall be treated as confidential and used solely for the purposes of this Act and of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ). Secti...

Section 33. Powers of Central Bank to advise and direct Section 33(1)(a) the business of an institution ("a bank or financial institution or a mortgage finance company;") is being conducted in a manner contrary to or not in compliance with the requirements of this Act or of any regulations made thereunder or in any manner detrimental to or not in the best interests of its depositors or members of the public ("individuals, partnerships, corporate bodies and trustees or managers of trusts, pension and provident funds or other similar funds;") ; or Section 33(1)(b) give advice and make recommendations to the institution ("a bank or financial institution or a mortgage finance company;") with regard to the conduct of its business generally; Section 33(1)(b)(i) give advice and make recommendations to the institution ("a bank or financial institution or a mortgage finance company;") with regard to the conduct of its business generally; Section 33(1)(b)(ii) issue directions regarding measures to be taken to improve the management or business methods of the institution ("a bank or financial institution or a mortgage finance company;") or to secure or improve compliance with the requirements...

Section 34. Powers of Central Bank to intervene in management Section 34(1)(a) if the institution ("a bank or financial institution or a mortgage finance company;") fails to meet any financial obligation, when it falls due including an obligation to pay any depositor; Section 34(1)(b) if a petition is filed, or a resolution proposed, for the winding up of the institution ("a bank or financial institution or a mortgage finance company;") or if any receiver or receiver and manager or similar officer is appointed in respect of the institution ("a bank or financial institution or a mortgage finance company;") or in respect of all or any part of its assets; Section 34(1)(c) if the auditor of an institution ("a bank or financial institution or a mortgage finance company;") makes a report to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under the provisions of subsection (4) of section 24 ; Section 34(1)(d) if the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") discovers (whether on an inspection or otherwise) or becomes aware of any fact or circumstance which, in the opinion of the Central Bank...

Section 35. Liquidation of insolvent institutions Section 35(1) If satisfied on reasonable grounds that an institution ("a bank or financial institution or a mortgage finance company;") has become insolvent, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may appoint the Board ("the Deposit Protection Fund Board established by;") to be a liquidator of the institution ("a bank or financial institution or a mortgage finance company;") . Section 35(2) Such an appointment has the same effect as the appointment of a liquidator by the High Court under Part VI of the Insolvency Act ( Cap. 53 ), and for that purpose, references in that Act to "the relevant date" and "commencement of the liquidation" are taken to be references to the date on which the Board is appointed as liquidator. Section 35(3)(a) if the Board ("the Deposit Protection Fund Board established by;") has already been appointed as its liquidator; or Section 35(3)(b) if the Board ("the Deposit Protection Fund Board established by;") has not already been so appointed without the approval of the High Court. Section 35(4)(a) has certified that it does not intend to exercise its pow...

Section 32A. Vetting of officials Section 32A(1) Notwithstanding any other provisions of this Act, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, from time to time, where it deems it necessary to do so, carry out an assessment of the professional and moral suitability of the persons managing or controlling institutions. Section 32A(2) An assessment under subsection (1) shall be in accordance with the criteria set in the First Schedule. Section 32A(3) Where, upon an assessment under this section, the Central bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") is satisfied as to the professional and moral suitability of the persons managing or controlling an institution ("a bank or financial institution or a mortgage finance company;") , it shall so certify in writing to the institution ("a bank or financial institution or a mortgage finance company;") . Section 32A(4) A person who, upon an assessment under this section, is not certified by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") as fit and proper to ma...

Section 32B. Examination and control of Groups Section require changes to the legal or management structure of a group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") or banking group ("a licensed institution and its subsidiaries, non-operating holding companies and subsidiaries of its non-operating holding companies;") if it determines that such structures in their current form constitute an impediment to the discharge of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ’s supervisory responsibilities; and

Section 33A. Powers upon audit or inspection report Section restrict, suspend or prohibit the payment of dividends by the institution ("a bank or financial institution or a mortgage finance company;") ;

Section 33B.[Repealed by ActNo. 23 of 2019, s. 45.]

Section 33C. Power of Central Bank to prescribe conditions on deposits or withdrawals Section 33C(1) The Central Bank shall prescribe, in regulations, conditions on deposits or withdrawals by customers in banks and financial institution ("a company, other than a bank, which carries on, or proposes to carry on,financial business and includes any other company which the Cabinet Secretary may, by notice in the, declare to be a financial institution for the purposes of this Act;") . Section 33C(2) The Central Bank shall within thirty days of coming into force of this Act, prescribe regulations setting out conditions for deposits and withdrawals by customers in banks and financial institutions in accordance with the Statutory Instruments Act. Section 33C(3) For avoidance of doubt no other person shall purport to make regulations required under this section and any existing guidelines or regulations prescribing conditions on deposits or withdrawals by customers shall cease to be operational within fourteen days of the coming into force of the regulations made under this section. [Act No. 10 of 2018 , s. 65.]

Section 33D. Powers on anti-money laundering, combating the financing of terrorism and countering proliferation financing matters Section 33D(1) Pursuant to sections 2A , 36A , 36B and 36C of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ), the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") shall regulate, supervise and enforce compliance for anti-money laundering, combating the financing of terrorism and countering proliferation financing purposes by all reporting institutions regulated and supervised by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") and to whom the provisions of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ) apply. Section 33D(2)(a) vet proposed significant shareholders, proposed beneficial owners, proposed directors and senior officers of a reporting institution ("a bank or financial institution or a mortgage finance company;") ; Section 33D(2)(b) conduct onsite inspection; Section 33D(2)(c) conduct offsite surveillance; Section 33D(2)(d) undertake consolidated supervision of an institution ("a bank or financial institution or a mortga...

Section 33E. Penalties for violations relating to money laundering, terrorism financing Section 33E(1) No institution ("a bank or financial institution or a mortgage finance company;") , director, officer , employer, agent or any other person shall violate or fail to comply with any provision of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ), or any regulation, guideline, rule, direction or instruction issued under the said Act or under section 33D of this Act. Section 33E(2)(a) in case of a legal person, to a penalty not exceeding twenty million shillings; Section 33E(2)(b) in the case of a natural person, to a penalty not exceeding one million shillings; and Section 33E(2)(c) to additional penalties not exceeding one hundred thousand shillings in each case for each day or part thereof during which such violation or non-compliance continues.

Section 34A. Voluntary liquidation Section 34A(1) An institution ("a bank or financial institution or a mortgage finance company;") may, with the approval of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , voluntarily liquidate itself if it is able to meet all its liabilities. Section 34A(2) An application for the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ’s approval for the purposes of subsection (1) shall be in the prescribed form. Section 34A(3) The Central Bank may, upon receipt of an application under subsection (2) , approve the application if satisfied as to the solvency of the institution ("a bank or financial institution or a mortgage finance company;") . Section 34A(4) Where the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") approves an application by an institution ("a bank or financial institution or a mortgage finance company;") under this section, such institution ("a bank or financial institution or a mortgage finance company;") shall forthwith cease all its operations except such activities as are incidental to the orderly...