Banking Act

This Act may be cited as the Banking Act.

Jurisdiction: Kenya
Instrument: Act or statute
Citation: Cap. 488
Version: 27 Dec 2024
Language: en
Official source: View official record ↗

Source attribution: Source: Kenya Law

Statute overview

About this statute

This Act may be cited as the Banking Act. Section 2 lists definitions and interpretations of terms used in the Act, including definitions for "agency", "bank", "banking business", "banking group", "beneficial owner", and others. Persons must not carry on or represent that they carry on banking or financial business, or use words like "bank" or "finance", unless they are the defined type of institution (or approved agency) and hold required consent or licence; contravention is an offence with fines or imprisonment. Institutions are liable for acts of their agents. Institutions intending to carry on banking, financial or mortgage finance business in Kenya must apply in writing to the Central Bank for a licence before commencing business; the Central Bank must certify that proposed managers are fit and proper, and the Cabinet Secretary may amend the First Schedule by Gazette notice. Central Bank may grant licences to institutions on payment of prescribed fee; it may set conditions; institutions must pay annual fees and face doubled fee or revocation for late payment; institutions that do not commence business within 12 months must reapply.

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Provisions of Banking Act

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Part I

PRELIMINARY

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

Section 1. Short title Section This Act may be cited as the Banking Act.
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PRELIMINARY - 2. Interpretation
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Section 2 lists definitions and interpretations of terms used in the Act, including definitions for "agency", "bank", "banking business", "banking group", "beneficial owner", and others.

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 ();") ; "banking business" means— (a) the accepting from members of the public ("individuals, partnerships, corporate bodies and trustees or managers of trusts, pension and provident funds or other similar funds;") of money on deposit repayable on demand or at the expiry of a fixed period or after notice; (b) the accepting from members of the public ("individuals, partnerships, corporate bodies and trustees or managers of trusts, pension and provident funds or other similar funds;") of money on current account ("an account maintained by a bank for and in the name of, or in a name designated by, a customer of the bank into which money is paid by or for the benefit of such customer and on which cheques and other bills of exchange may be drawn by, and transfers and other banking transactions made on the instructions of, the customer;") and payment on and acceptance of cheques; (c) the employing of money held on deposit or on current account ("an account maintained by a bank for and in the name of, or in a name designated by, a customer of the bank into which money is paid by or for the benefit of such customer and on which cheques and other bills of exchange may be drawn by, and transfers and other banking transactions made on the instructions of, the customer;") , or any part of the money, by lending, investment or in any other manner for the account and at the risk of the person so employing the money; and (d) such other business activity as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may prescribe; "banking group" means a licensed institution ("a bank or financial institution or a mortgage finance company;") and its subsidiaries, non-operating holding companies and subsidiaries of its non-operating holding companies; “beneficial owner” has the meaning assigned to it under the Companies Act ( Cap. 486 ); "Board" means the Deposit Protection Fund Board established by section 36 ; "branch" means any permanent premises, other than its head office, at which an institution ("a bank or financial institution or a mortgage finance company;") transacts business in or outside Kenya; "Cabinet Secretary" means the Cabinet Secretary for the time being responsible for matters relating to Finance; "capital" means paid-up share capital or, in the case of an institution ("a bank or financial institution or a mortgage finance company;") incorporated outside Kenya, its assigned capital ; "competent authority" means any of the bodies set out in the Third Schedule; "convertible currency" means currency which is freely negotiable and transferable in international exchange markets at exchange rate margins consistent with the Articles of Agreement of the International Monetary Fund; "co-ordinator" means the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; "core capital" means 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 ("all reserves created or increased through share premiums, retained profits (after deducting all expenses, provisions, taxation and dividends) and general reserves if such disclosed reserves are permanent and unencumbered and thus able to absorb losses;") , less goodwill or any other intangible assets; "current account" means an account maintained by a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") for and in the name of, or in a name designated by, a customer of the bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") into which money is paid by or for the benefit of such customer and on which cheques and other bills of exchange may be drawn by, and transfers and other banking transactions made on the instructions of, the customer; "disclosed reserves" includes all reserves created or increased through share premiums, retained profits (after deducting all expenses, provisions, taxation and dividends) and general reserves if such disclosed reserves are permanent and unencumbered and thus able to absorb losses; "financial business" means— (a) the accepting from members of the public ("individuals, partnerships, corporate bodies and trustees or managers of trusts, pension and provident funds or other similar funds;") of money on deposit repayable on demand or at the expiry of a fixed period or after notice; and (b) the employing of money held on deposit or any part of the money, by lending, investment or in any other manner for the account and at the risk of the person so employing the money; "financial institution" means a company, other than a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , which carries on, or proposes to carry on, financial business and includes any other company which the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may, by notice in the Gazette , declare to be a financial institution for the purposes of this Act; "financial year" means the financial year prescribed in section 20A ; "group" means a non-operating holding company , its subsidiaries and all associated companies of the parent or its subsidiaries; "institution" means 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;") or a mortgage finance company ; "land" includes freehold and leasehold land in Kenya and all buildings and permanent improvements thereon; "licence" means a licence granted under section 5 ; "members of the public" means individuals, partnerships, corporate bodies and trustees or managers of trusts, pension and provident funds or other similar funds; "mortgage finance company" means a company (other than 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;") ) which accepts from the members of the public ("individuals, partnerships, corporate bodies and trustees or managers of trusts, pension and provident funds or other similar funds;") , money— (a) on deposit repayable on demand or at the expiry of a fixed period or after notice; or (b) on current account ("an account maintained by a bank for and in the name of, or in a name designated by, a customer of the bank into which money is paid by or for the benefit of such customer and on which cheques and other bills of exchange may be drawn by, and transfers and other banking transactions made on the instructions of, the customer;") and payment on and acceptance of cheques, and is established for the purpose of employing such money in accordance with section 15 ; "non-operating holding company" means a company, other than the institution ("a bank or financial institution or a mortgage finance company;") , which has approved control of an institution ("a bank or financial institution or a mortgage finance company;") and whose activities are limited to holding investments in subsidiaries, holding properties used by group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") members; raising funds to invest in, or to provide support to, subsidiaries, raising funds to conduct its own limited activities, investing funds on behalf of the group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") , conducting the banking activities required for its own limited functions, and providing administrative, risk management and financial services to support the efficient operation of the group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") ; "officer" , in relation to an institution ("a bank or financial institution or a mortgage finance company;") , means a Director or any other person, by whatever name or title he may be called or described, who carries out or is empowered to carry out functions relating to the overall direction in Kenya of that institution ("a bank or financial institution or a mortgage finance company;") or takes part in the general management thereof in Kenya; "place of business" means any premises, other than the head office, including a branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") , an 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:") or a mobile unit, or such other premises as may, from time to time, be prescribed by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , at which an institution ("a bank or financial institution or a mortgage finance company;") transacts banking or financial business and which is open to the public; "public entity" means the Government, a local authority or a public body declared by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") to be a public entity for the purposes of this Act; "representative office" means an office established in Kenya under the provision of Part IX; “significant shareholder” means a person including a beneficial owner , other than the Government or public entity ("the Government, a local authority or a public body declared by the Cabinet Secretary to be a public entity for the purposes of this Act;") , who holds, directly or indirectly, or otherwise has a beneficial interest amounting to five per cent or more of the share capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") of an institution ("a bank or financial institution or a mortgage finance company;") or a corporate entity seeking to become an institution ("a bank or financial institution or a mortgage finance company;") ; "significantly undercapitalized" in relation to an institution ("a bank or financial institution or a mortgage finance company;") , means that the institution ("a bank or financial institution or a mortgage finance company;") holds less than-fifty percent of the capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") requirements prescribed under section 18 ; "supplementary capital" means general provisions which are held against future and presently unidentified losses that are freely available to meet losses which subsequently materialize, and revaluation reserves on banking premises which arise periodically from independent valuation of such premises, and any other form of capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") as may be determined from time to time by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; "the Central Bank" means the Central Bank of Kenya established by the Central Bank of Kenya Act ( Cap. 491 ); "total capital" means the total sum of 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 supplementary capital ("general provisions which are held against future and presently unidentified losses that are freely available to meet losses which subsequently materialize, and revaluation reserves on banking premises which arise periodically from independent valuation of such premises, and any other form of capital as may be determined from time to time by the Central Bank;") ; "total deposit liabilities" means the total deposits in or outside Kenya in any institution ("a bank or financial institution or a mortgage finance company;") which are repayable on demand or after a fixed period or after notice; "undercapitalized bank" means an institution ("a bank or financial institution or a mortgage finance company;") that does not fully comply with the capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") requirements prescribed in section 18 ; "unimpaired reserves" means capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") and revenue reserves not subject to any charge or other encumbrance or option or liable to reduction by payment of dividend or otherwise. Section 2(2)(a) its holding company or its subsidiary; Section 2(2)(a)(i) its holding company or its subsidiary; Section 2(2)(a)(ii) a subsidiary of its holding company; Section 2(2)(a)(iii) a holding company of its subsidiary; Section 2(2)(a)(iv) its non-operating holding company as its subsidiary; Section 2(2)(a)(v) a subsidiary of a non-operating holding company ; Section 2(2)(a)(vi) any person who controls the company or body corporate whether alone or with his associates or with its associates; Section 2(2)(b) any member of his family; and Section 2(2)(b)(i) any member of his family; and Section 2(2)(b)(ii) any company or other body corporate controlled directly or indirectly, by him whether alone or with his associates; Section 2(2)(b)(iii) deleted by ActNo. 57 of 2012, s. 38(b)(iii), Section 2(3)(a) the ability to influence, whether directly or indirectly, the composition of the board of directors of a company or any other body corporate; Section 2(3)(b) holding, directly or indirectly, whether personally or through a holding company or companies or subsidiaries thereof, or in any otherway, an aggregate of twenty per centum or more of the voting power of a company or body corporate, whether alone or with associates or with other associates of the company or body corporate; or Section 2(3)(c) as may be determined by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , where a person has the ability to exercise a dominant influence over the management or policies of a company or body corporate on the basis of an agreement or by any other means, regardless of the amount of formal ownership or voting rights.

Part II

LICENSING OF INSTITUTIONS

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LICENSING OF INSTITUTIONS - 3. Restrictions on carrying onbanking business,etc.
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Persons must not carry on or represent that they carry on banking or financial business, or use words like "bank" or "finance", unless they are the defined type of institution (or approved agency) and hold required consent or licence; contravention is an offence with fines or imprisonment. Institutions are liable for acts of their agents.

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 other language, in the name, description or title under which it transacts business in Kenya or make any representation whatsoever that it transacts banking business ; Section 3(1)(c) unless it is 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;") or mortgage finance company and has obtained the consent of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , use the word "finance" or any of its derivatives or any other word indicating the transaction of financial business or the business of a mortgage finance company , or the equivalent of the foregoing in any other language, in the name, description or title under which it transacts business in Kenya or make any representation whatsoever that it transacts financial business : Section 3(2) Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding three years or to both. Section 3(3) Where an institution ("a bank or financial institution or a mortgage finance company;") conducts business through an agent, the institution ("a bank or financial institution or a mortgage finance company;") shall be liable for the acts or omissions of the agent in so far as such acts or omissions relate to that business.
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LICENSING OF INSTITUTIONS - 4. Application forlicence
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Institutions intending to carry on banking, financial or mortgage finance business in Kenya must apply in writing to the Central Bank for a licence before commencing business; the Central Bank must certify that proposed managers are fit and proper, and the Cabinet Secretary may amend the First Schedule by Gazette notice.

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 condition and history of the institution ("a bank or financial institution or a mortgage finance company;") ; Section 4(5)(b) the character of its management; Section 4(5)(c) the professional and moral suitability of the persons proposed to manage or control the institution ("a bank or financial institution or a mortgage finance company;") ; Section 4(5)(d) the adequacy of its capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") structure and earning prospects; Section 4(5)(e) the convenience and needs of the area to be served; and Section 4(5)(f) the public interest which will be served by the granting of the licence ("a licence granted under;") . Section 4(6) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may, by notice in the Gazette , amend the First Schedule. Section 4(7) If a person, other than the Government or a public entity ("the Government, a local authority or a public body declared by the Cabinet Secretary to be a public entity for the purposes of this Act;") , holds, directly or indirectly, or otherwise has a beneficial interest in, more than five percent of the share capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") of an institution ("a bank or financial institution or a mortgage finance company;") or if it is proposed that such a person shall so hold or have such a beneficial interest, that person shall be deemed, for the purpose of this section, to be a person proposed to manage or control the institution ("a bank or financial institution or a mortgage finance company;") .
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LICENSING OF INSTITUTIONS - 5. Licensing of institutions
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Central Bank may grant licences to institutions on payment of prescribed fee; it may set conditions; institutions must pay annual fees and face doubled fee or revocation for late payment; institutions that do not commence business within 12 months must reapply.

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 shall be deemed to be a licence ("a licence granted under;") to which this subsection applies. Section 5(4) An institution ("a bank or financial institution or a mortgage finance company;") shall pay annual fees in such amount and in such manner as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may prescribe. Section 5(5) An institution ("a bank or financial institution or a mortgage finance company;") that fails to pay the annual fees by the end of the financial year ("the financial year prescribed in;") shall pay double the annual fee, if payment is made within ninety days after the end of the financial year ("the financial year prescribed in;") . Section 5(6) An institution ("a bank or financial institution or a mortgage finance company;") which fails to pay the annual fees within ninety days after the end of the financial year ("the financial year prescribed in;") referred to in subsection (5) shall have its licence ("a licence granted under;") revoked under section 6 . Section 5(7) Any fee or other amount payable under this section shall be paid into the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 5(8) Deleted by ActNo. 14 of 2015, s. 34. Section 5(9) Deleted by ActNo. 14 of 2015, s. 34. Section 5(10) Deleted by ActNo. 14 of 2015, s. 34. Section 5(11) Deleted by ActNo. 14 of 2015, s. 34.
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LICENSING OF INSTITUTIONS - 6. Revocation oflicence
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Before revoking a licence the Central Bank must give the institution at least twenty-eight days' written notice and consider any written representations; revoked institutions may be allowed to wind up under conditions, and the Central Bank may exercise Part VII powers and must publish revoked institutions' names in the Gazette.

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 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)(ii) the institution ("a bank or financial institution or a mortgage finance company;") may, notwithstanding that its licence ("a licence granted under;") has been revoked under this subsection, continue to carry on its business for the purpose of winding up its affairs for such period as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may determine so long as it does not accept new deposits, open new current accounts or make any loans or investments. Section 6(2) Notwithstanding the revocation of a licence ("a licence granted under;") under this section, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may exercise any of the powers conferred on it under Part VII if it is necessary for the protection of the interests of the depositors. Section 6(3) The Central Bank shall cause the name of every institution ("a bank or financial institution or a mortgage finance company;") whose licence ("a licence granted under;") is revoked under this section to be published forthwith in the Gazette .
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LICENSING OF INSTITUTIONS - 7. Minimumcapitalrequirements
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A licence shall not be granted to an institution unless it meets the minimum capital requirements in the Second Schedule; institutions incorporated outside Kenya must also give an undertaking to keep assigned capital within Kenya; the Cabinet Secretary may amend the Second Schedule by order.

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 company;") incorporated outside Kenya shall, in addition to meeting 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, give an undertaking satisfactory to the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") to keep within Kenya at all times during the currency of its licence ("a licence granted under;") , out of its own funds, a capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") assigned to its Kenya branches (in this Act referred to as " assigned capital ") of such minimum amount as may be prescribed.
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LICENSING OF INSTITUTIONS - 8. Location of places of business
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Institutions must obtain the Central Bank's approval before opening or relocating branches or other places of business in Kenya; approvals lapse if not acted on within 12 months; six months' written notice is required before closing a place of business unless the Central Bank allows a shorter period; the Central Bank prescribes how approvals are granted.

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) the history and financial condition of the institution ("a bank or financial institution or a mortgage finance company;") ; Section 8(2)(b) the character of its management; Section 8(2)(c) the professional and moral suitability of its management; Section 8(2)(d) the adequacy of its capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") structure and earning prospects; Section 8(2)(e) the convenience and needs of the area to be served and that the public interest will be served by the opening of 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, as the case may be, the change of location of the 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;") . Section 8(2A) If the opening or change for which approval has been given under subsection (1) does not occur within twelve months after the approval is given, the approval shall lapse. Section 8(2B) Subsection (2A) shall not apply to an approval given before that subsection came into operation. Section 8(3) No institution ("a bank or financial institution or a mortgage finance company;") shall close any of its places of business in Kenya without first giving to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") six months’ written notice of its intention to do so or such shorter period of notice as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may allow. Section 8(4) The Central Bank shall prescribe the manner in which approvals under this section shall be granted.
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LICENSING OF INSTITUTIONS - 8A. Branches and subsidiaries
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Institutions must get prior approval from the Cabinet Secretary to open branches or establish subsidiaries outside Kenya; they must apply in writing through the Central Bank; they must notify the Cabinet Secretary via the Central Bank at least six months before closing such branches or subsidiaries (unless a shorter period is allowed); the Central Bank may require information and may permit services to customers outside Kenya subject to conditions.

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 assigned capital;") structure; Section 8A(3)(c) the viability and earning prospects of the proposed branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") or subsidiary; Section 8A(3)(d) such other matter as may have a bearing on the institution ("a bank or financial institution or a mortgage finance company;") or proposed branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") or subsidiary as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may require. Section 8A(4) An institution ("a bank or financial institution or a mortgage finance company;") intending to close any of its branches or subsidiaries outside Kenya shall give notice 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 ();") of its intention, at least six months before the date of the intended closure, or within such shorter period as the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may, in any particular case, allow. Section 8A(5) Notwithstanding the provisions of this section, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, subject to such conditions or limitations as it may prescribe, permit an institution ("a bank or financial institution or a mortgage finance company;") to provide such services as it may, in any particular case, specify, to its customers who are outside the country through banking institutions located outside Kenya.
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LICENSING OF INSTITUTIONS - 9. Amalgamations and transfers of assets and liabilities
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Certain amalgamations and transfers of assets/liabilities involving institutions require the prior written approval of the Cabinet Secretary; institutions must notify the Central Bank of shareholder confirmations; the Central Bank publishes notices, withdraws licences on amalgamation or full-transfer and registers/ issues licences on payment.

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 institution ("a bank or financial institution or a mortgage finance company;") approved by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") for the purpose of the said transfer. Section 9(3)(a) all the assets and liabilities of the amalgamating institutions or, in the case of a transfer of assets and liabilities, those assets and liabilities of the transferor institution ("a bank or financial institution or a mortgage finance company;") that are transferred in terms of the transaction shall vest in and become binding upon the amalgamated institution ("a bank or financial institution or a mortgage finance company;") or, as the case may be, the receiving institution ("a bank or financial institution or a mortgage finance company;") ; Section 9(3)(b) the amalgamated institutions or, in the case of the transfer of assets and liabilities, the receiving institution ("a bank or financial institution or a mortgage finance company;") shall have the same rights and be subject to the same obligations as those which the amalgamating institution ("a bank or financial institution or a mortgage finance company;") or, as the case may be, the transferor institution ("a bank or financial institution or a mortgage finance company;") may have had or to which they or it may have been subject immediately before the amalgamation or transfer; Section 9(3)(c) all agreements, appointments, transactions and documents entered into, made, drawn up or executed with, by or in favour of any of the amalgamating institutions or, as the case may be, the transferor institution ("a bank or financial institution or a mortgage finance company;") and in force immediately prior to the amalgamation or transfer, but excluding such agreements, appointments, transactions and documents that, by virtue of the terms and conditions of the amalgamation or transfer, are not to be retained in force, shall remain in full force and effect and shall be construed for all purposes as if they had been entered into, made, drawn up or executed with, by or in favour of the amalgamated institution ("a bank or financial institution or a mortgage finance company;") or, as the case may be, the receiving institution ("a bank or financial institution or a mortgage finance company;") or person to whom the assets and liabilities in question are transferred; and Section 9(3)(d) any bond, pledge, guarantee or instrument to secure future advances, facilities or services by any of the amalgamating institutions or, as the case may be, by the transferor institution ("a bank or financial institution or a mortgage finance company;") , which was in force immediately prior to the amalgamation or transfer, shall remain of full force and effect and shall be construed as a bond, pledge, guarantee or instrument given to or in favour of the amalgamated institution ("a bank or financial institution or a mortgage finance company;") or, as the case may be, the receiving institution ("a bank or financial institution or a mortgage finance company;") or person to whom such assets and liabilities are transferred, as security for future advances, facilities or services by that 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 person except where, in the case of such transfer, any obligation to provide such advances, facilities or services is not included in the transfer. Section 9(4)(a) confirmation at a general meeting of shareholders of each of the institutions concerned; or Section 9(4)(b) in the case of a transaction effecting the transfer of assets and liabilities of one institution ("a bank or financial institution or a mortgage finance company;") to another institution ("a bank or financial institution or a mortgage finance company;") , to confirmation at a general meeting of shareholders of the transferor institution ("a bank or financial institution or a mortgage finance company;") and the receiving institution ("a bank or financial institution or a mortgage finance company;") and the notice convening such a meeting shall contain or have attached to it the terms and conditions or the relevant agreement or arrangement. Section 9(5) Notice of the passing of the resolution confirming any amalgamation or arrangement, or any arrangement for the transfer of assets and liabilities, together with a copy of such resolution and the terms and conditions of the relevant agreement or arrangement, duly certified by the chairperson of the meeting at which such resolution was passed and by the secretary of the institution ("a bank or financial institution or a mortgage finance company;") concerned shall be sent to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") by each of the institutions involved and after receipt of such notices from all the parties to the relevant agreement or arrangement, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") shall publish those notices. Section 9(6)(a) of any amalgamation of two or more institutions, the licences of each of the amalgamating institutions shall be deemed to be cancelled and shall be withdrawn by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , and on payment by the resulting institution ("a bank or financial institution or a mortgage finance company;") of the prescribed licence ("a licence granted under;") fee, the Central Bank shall register such institution ("a bank or financial institution or a mortgage finance company;") subject mutatis mutandis to the provisions of section 5 as an institution; or Section 9(6)(b) of any arrangement for the transfer of all the assets and liabilities of an institution ("a bank or financial institution or a mortgage finance company;") , the licence ("a licence granted under;") of such institution ("a bank or financial institution or a mortgage finance company;") shall be deemed to be cancelled and shall be withdrawn by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 9(7) Upon the licensing of an institution ("a bank or financial institution or a mortgage finance company;") pursuant to subsection (6) , the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") shall issue a licence ("a licence granted under;") to the institution ("a bank or financial institution or a mortgage finance company;") . Section 9(8)(a) there is registered any title to property belonging to, or any bond or other right in favour of, or any appointment of or by; or Section 9(8)(b) there is registered any share, stock, debenture or other marketable security in favour of; or Section 9(8)(c) that the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") has approved the amalgamation or transfer pursuant to subsection (1) ; and Section 9(8)(c)(i) that the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") has approved the amalgamation or transfer pursuant to subsection (1) ; and Section 9(8)(c)(ii) that such amalgamation or transfer has been duly effected, Section 9(9)(a) a transfer of assets and liabilities under subsection (3) ; or Section 9(9)(b) any endorsement or alteration made to record such transfer, upon submission to the Registrar of Companies, Registrar of Titles or any other person referred to in subsection (8) . Section 9(10) The provisions of this section shall not affect the rights of any creditor or any institution ("a bank or financial institution or a mortgage finance company;") which has amalgamated with or transferred all its assets and liabilities to any other institution ("a bank or financial institution or a mortgage finance company;") or taken over all the assets and liabilities of any other institution ("a bank or financial institution or a mortgage finance company;") , except to the extent provided in this section. Section 9(11) In this section— "amalgamation institutions" means the institutions contemplating effecting an amalgamation; "receiving institution ("a bank or financial institution or a mortgage finance company;") " means the institution ("a bank or financial institution or a mortgage finance company;") to which assets and liabilities are transferred through a transaction effected under this section; "resulting institution ("a bank or financial institution or a mortgage finance company;") " means the institution ("a bank or financial institution or a mortgage finance company;") resulting from an amalgamation effected under this section; "transferor institution ("a bank or financial institution or a mortgage finance company;") " means the institution ("a bank or financial institution or a mortgage finance company;") which transfers its assets and liabilities to a receiving institution ("a bank or financial institution or a mortgage finance company;") .
9A
LICENSING OF INSTITUTIONS - 9A. Directors, Chief Executive Officers and significant shareholders to be fit and proper persons
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Institutions must ensure that directors, senior officers and significant shareholders are certified by the Central Bank as fit and proper persons before appointment, election or becoming significant shareholders; the Central Bank may determine unfitness and require cessation of office or limits on shareholding.

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 a mortgage finance company;") is applying for a licence ("a licence granted under;") to commence business under the provisions of this Act; Section 9A(3)(c) when new evidence becomes available to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") indicating that an already existing significant shareholder does not fulfil the fit and proper criteria as set out in Part B of the First Schedule. Section 9A(3A)(a) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") has reason to believe or reasonably suspect that such shareholder has reduced its direct or indirect shareholding in an institution ("a bank or financial institution or a mortgage finance company;") or in a corporate entity to below five percent in order to avoid vetting; or Section 9A(3A)(b) the shareholder exercises or has the capacity to exercise direct or indirect control of the institution ("a bank or financial institution or a mortgage finance company;") or corporate entity through his or its associates. Section 9A(3B)(a) the ability to influence the management of an institution ("a bank or financial institution or a mortgage finance company;") , a corporate shareholder of an institution ("a bank or financial institution or a mortgage finance company;") or a corporate entity seeking to become an institution ("a bank or financial institution or a mortgage finance company;") ; or Section 9A(3B)(b) the ability to influence, directly or indirectly, the decisions of the shareholders of an institution ("a bank or financial institution or a mortgage finance company;") , a corporate shareholder of an institution ("a bank or financial institution or a mortgage finance company;") or a corporate entity seeking to become an institution ("a bank or financial institution or a mortgage finance company;") . Section 9A(3C) Any non- significant shareholder proposed to be vetted under this section shall be vetted in accordance with the criteria set out in Part B of the First Schedule and the vetting requirements for significant shareholders set out in the Prudential Guidelines. Section 9A(3D) A non- significant shareholder , upon being determined by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") as not fulfilling the fit and proper criteria as set out in Part B of the First Schedule shall be subject to the limitation set out in subsection (4)(a) of this section and may in addition be directed by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") to cease any form of association or relationship with a particular person or institution ("a bank or financial institution or a mortgage finance company;") . Section 9A(4)(a) cease to exercise all his voting rights immediately upon the institution ("a bank or financial institution or a mortgage finance company;") being notified by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") in writing that the shareholder does not fulfil the fit and proper criteria as set out in Part B of the First Schedule; and Section 9A(4)(b) reduce the holding of shares to below five percent of the share capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") in the institution ("a bank or financial institution or a mortgage finance company;") within twelve months, or such longer period as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may determine. Section 9A(5) The Central Bank may determine that a person who already is a director or senior officer of an institution ("a bank or financial institution or a mortgage finance company;") is not a fit and proper person to manage or control the institution ("a bank or financial institution or a mortgage finance company;") and upon the institution ("a bank or financial institution or a mortgage finance company;") being notified in writing of that determination, the person shall, if he is a Director or senior officer , cease to hold office. Section 9A(6) Deleted by ActNo. 14 of 2015, s. 35. Section 9A(7) In determining whether or not a person is a fit and proper person to manage or control an institution ("a bank or financial institution or a mortgage finance company;") the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") shall apply the criteria prescribed in the First Schedule to determine whether the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") is satisfied as to the professional and moral suitability of the person. Section 9A(8)(a) the chief executive officer , deputy chief executive officer , chief operating officer , chief financial officer , secretary to the board of directors, treasurer, chief internal auditor, or manager of a significant unit of an institution ("a bank or financial institution or a mortgage finance company;") licensed under this Act; Section 9A(8)(b) a person with a similar level of position or responsibilities as a person described in paragraph (a) .

Part III

PROHIBITED BUSINESS

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PROHIBITED BUSINESS - 10. Limit on advances, credits and guarantees
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Institutions (banks, financial institutions, mortgage finance companies) in Kenya must not grant or allow advances, credits, guarantees or other liabilities to a person so that the total exposure to that person exceeds 25% of the institution's core capital; the Central Bank may authorize mortgage finance companies to exceed that limit in particular cases; certain public and inter-bank transactions and pre‑existing exposures are excluded.

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, its assigned capital;") by such per centum as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may in each particular case prescribe. Section 10(2) The provisions of this section shall not apply to transactions with a public entity ("the Government, a local authority or a public body declared by the Cabinet Secretary to be a public entity for the purposes of this Act;") , or to transactions between banks or between branches of a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , or to the purchase of or advances made against clean or documentary bills of exchange or documents of title to goods entitling some person to payment outside Kenya for imports. Section 10(3)(a) the advances, credit facilities, financial guarantees and other liabilities of that person and his associates shall be aggregated for the calculation of their total value; and Section 10(3)(b) the restriction imposed by subsection (1) shall apply to advances, credit facilities, financial guarantees and other liabilities to or in respect of that person and his associates. Section 10(4) The provisions of subsection (1) shall not apply to any advance or credit facility granted, or any financial guarantee given, or any other liability incurred, by an institution ("a bank or financial institution or a mortgage finance company;") on behalf of any person before the commencement of this section.
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PROHIBITED BUSINESS - 11. Restrictions on advances, credits and guarantees
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Section 11 prohibits an institution (bank, financial institution or mortgage finance company) from granting or permitting certain advances, credits, guarantees or other liabilities in specified circumstances (including against its own shares, to companies it controls (>25%), unsecured employee advances, aggregate exposures above specified percentages of core capital, and conduct in a fraudulent or reckless manner).

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 which any of its officers or significant shareholders has an interest as an agent, Director, manager or shareholder; or Section 11(1)(d)(iii) to any person of whom or of which any of its officers or significant shareholders is a guarantor; or Section 11(1)(e) is approved by the full board of directors of the institution ("a bank or financial institution or a mortgage finance company;") upon being satisfied that it is viable; Section 11(1)(e)(i) is approved by the full board of directors of the institution ("a bank or financial institution or a mortgage finance company;") upon being satisfied that it is viable; Section 11(1)(e)(ii) is made in the normal course of business and on terms similar to those offered to ordinary customers of the institution ("a bank or financial institution or a mortgage finance company;") , Section 11(1)(f) grant or permit to be outstanding any advances or credit facilities or give any financial guarantees or incur any other liabilities to, or in favour of, or on behalf of, a person mentioned in paragraph (c) , (d) or (e) and his associates amounting in the aggregate, for that person and all his associates, to more than twenty percent of 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 the institution ("a bank or financial institution or a mortgage finance company;") ; or Section 11(1)(g) grant or permit to be outstanding advances or credit facilities or give any financial guarantee or incur any other liabilities to or in favour of, or on behalf of, its associates and the persons mentioned in paragraphs (c) , (d) and (e) amounting in the aggregate to more than one hundred percent of 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 the institution ("a bank or financial institution or a mortgage finance company;") ; or Section 11(1)(h) grant any advance or credit facility or give guarantee or incur any liability or enter into any contract or transaction or conduct its business or part thereof in a fraudulent or reckless manner or otherwise than in compliance with the provisions of this Act. Section 11(1A)(a) transacting business beyond the limits set under this Act or the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ); Section 11(1A)(b) offering facilities contrary to any guidelines or regulations issued by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 11(1A)(c) failing to observe the institution ("a bank or financial institution or a mortgage finance company;") ’s policies as approved by the Board ("the Deposit Protection Fund Board established by;") of Directors; or Section 11(1A)(d) misuse of position or facilities of the institution ("a bank or financial institution or a mortgage finance company;") for personal gain. Section 11(1B) If the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") determines that the interest of a group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") of two or more persons are so inter-related as to cause them to be considered as a single person or that an associate relationship exists, then for the purposes of this section, the total indebtedness of that group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") shall be combined and shall be deemed to be in respect of a single person or a person and the person’s associates; Section 11(2) The prohibitions contained in subsection (1) shall apply whether or not the advance, loan or credit facility in question is granted to any person alone or with others. Section 11(3)(a) all officers of an institution ("a bank or financial institution or a mortgage finance company;") shall be liable jointly and severally to indemnify the institution ("a bank or financial institution or a mortgage finance company;") against any loss arising in respect of the advance, loan or credit facility: Provided that in the case of an advance, loan or credit facility to a person other that a director of the institution ("a bank or financial institution or a mortgage finance company;") or a person participating in the general management of the institution ("a bank or financial institution or a mortgage finance company;") , an officer shall not be so liable if he shows that, through no act or omission on his part, he was not aware that the contravention was taking place or was intended or about to take place, or he took all reasonable steps to prevent it taking place; Section 11(3)(b) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, in the case of an advance, loan or credit facility to a director of the institution ("a bank or financial institution or a mortgage finance company;") , direct the removal of such director from the board of directors of the institution ("a bank or financial institution or a mortgage finance company;") and may direct the suspension of any other officer or employee of the institution ("a bank or financial institution or a mortgage finance company;") who sanctioned the advance, loan or credit facility and the institution ("a bank or financial institution or a mortgage finance company;") shall comply with every direction of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under this paragraph forthwith. Section 11(4) If any Director removed, or officer or other employee of an institution ("a bank or financial institution or a mortgage finance company;") suspended under subsection (3) is aggrieved by such decision, he may apply to the High Court for determination of the matter and the High Court may confirm, reverse or modify the decision and make such other order in the circumstances as it thinks just; and pending the determination of any application or appeal therefrom, the order, removal or suspension shall remain in effect. Section 11(5) A director of an institution ("a bank or financial institution or a mortgage finance company;") who defaults in the repayment of any advance or loan made to him by the institution ("a bank or financial institution or a mortgage finance company;") for three consecutive months shall forthwith be disqualified from holding office as such. Section 11(6)(a) fails to comply with any direction of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under subsection (3)(b) ; or Section 11(6)(b) permits a director who is disqualified by virtue of subsection (5) to continue holding office as such, Section 11(7) Where an offence under subsection (6) continues, the institution ("a bank or financial institution or a mortgage finance company;") shall, in addition to the penalty prescribed under section 49 , be liable to such penalty as may be prescribed for each day or part thereof during which the offence continues. Section 11(8) The regulations under section 55 may govern the steps an institution is required to take to ensure that it does not, contrary to subsection (1)(f) , permit to be outstanding anything described in that provision and, without limiting the generality of the foregoing, the regulations may impose time limits within which the steps must be taken. Section 11(9) The provisions of subsections (1) and (2) shall apply to a banking group ("a licensed institution and its subsidiaries, non-operating holding companies and subsidiaries of its non-operating holding companies;") on a consolidated basis.
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PROHIBITED BUSINESS - 12. Restriction on trading and investments
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Institutions that, at the commencement of the Act, carry on trading interests (banks, financial institutions or mortgage finance companies) must dispose of those trading interests within such time as the Central Bank may allow.

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;
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PROHIBITED BUSINESS - 13. Restrictions on ownership of sharecapitalof aninstitution
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Financial institutions and mortgage finance companies are prohibited from holding or having beneficial interest in banks; institutions may not transfer more than five per cent of their share capital to a person or entity without prior written approval of the Central Bank; nominees and corporate holders must disclose ultimate beneficial owners.

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 indirectly, any part of the share capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") of, or otherwise have beneficial interest in, any bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") . Section 13(3) Where any share is held by a company, other body corporate or by a nominee on behalf of another person, the company, other body corporate or the nominee, as the case may be, shall disclose to the institution ("a bank or financial institution or a mortgage finance company;") and to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") the full particulars of the individual who is the ultimate beneficial owner of the share. Section 13(4) No institution ("a bank or financial institution or a mortgage finance company;") shall transfer more than five per cent of its share capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") to an individual or an entity except with the prior written approval of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") .
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PROHIBITED BUSINESS - 14. Restrictions on advances for purchase ofland
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Institutions (banks, financial institutions, mortgage finance companies) must not make loans or advances for purchase, improvement or alteration of land so that those loans exceed 40% of their total deposit liabilities; the Central Bank may authorize exceeding this up to 70%; accepting security over land for loans made in good faith for other purposes is allowed.

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.
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PROHIBITED BUSINESS - 15. Mortgage finance companies
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Subject to the Act, a mortgage finance company may grant credit facilities secured by securities other than land.

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.
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PROHIBITED BUSINESS - 16. Restrictions on deposit-taking
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General prohibition: no person may invite or accept deposits in the course of carrying on a deposit-taking business, except licensed institutions or duly approved agencies.

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, and is repayable only in the event that the property or services is not or are not in fact sold, hired or otherwise provided; Section 16(3)(b) it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non-performance of a contract; or Section 16(3)(c) without prejudice to paragraph (b) , it is paid by way of security for the delivery up or return of any property whether in a particular state of repair or otherwise. Section 16(4)(a) a sum paid by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") or by an institution ("a bank or financial institution or a mortgage finance company;") or the persons mentioned in section 54 ; or Section 16(4)(b) a sum which is paid by a person to an associate of that person. Section 16(5)(a) in the course of the business money received by way of deposit is lent to others; or Section 16(5)(b) any other activity of the business is financed, wholly or to any material extent, out of the capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") of or the interest on money received by way of deposit. Section 16(6)(a) the person carrying it on does not hold himself out as accepting deposits on a day-to-day basis; and Section 16(6)(b) any deposits which are accepted are accepted only on particular occasions, whether or not involving the issue of debentures or other securities. Section 16(7) For the purposes of subsection (5) , all the activities which a person carries on by way of business shall be regarded as a single business carried on by him. Section 16(8) In determining, for the purposes of subsection (6)(b) , whether deposits are accepted only on particular occasions regard shall be had to the frequency of those occasions and to any characteristics distinguishing them from each other. Section 16(9) Any person who contravenes subsection (1) shall be guilty of an offence and liable to imprisonment for a term not exceeding three years or to a fine not exceeding one hundred thousand shillings or to both. [Act No. 8 of 2009 , s. 55.]
16A
PROHIBITED BUSINESS - 16A. Imposition of charges and payment of interest
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Banks and mortgage finance companies must not charge fees on savings, seven-day call or fixed deposit accounts; they must pay interest on savings and on seven-day/fixed deposit accounts on agreed terms; interest may be forfeited if withdrawn before maturity.

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.]

Part IV

RESERVES AND DIVIDENDS

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RESERVES AND DIVIDENDS - 17. Ratio betweencore capitaland deposits
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An institution described as "a bank or financial institution or a mortgage finance company" must keep its core capital at least eight per cent of its total deposit liabilities.

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.]
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RESERVES AND DIVIDENDS - 18. Ratio betweencapitaland assets
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The Central Bank may set minimum capital ratios for institutions and banking groups; non-operating holding companies that control groups must maintain adequate capital and liquidity.

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 non-operating holding company or any other vehicle of ownership which controls a group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") shall, in relation to its business, maintain adequate capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") and adequate forms of liquidity to demonstrate that it is a source of strength for the institution ("a bank or financial institution or a mortgage finance company;") and shall comply with any regulations issued by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") on minimum ratios or capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") requirements in any other form. [Act No. 4 of 1999 , s. 83, Act No. 57 of 2012 , s. 42.]
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RESERVES AND DIVIDENDS - 19. Minimum liquid assets
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Banks and mortgage finance companies must hold minimum liquid assets as set by the Central Bank; failure to comply within Central Bank-prescribed time can trigger a daily penalty interest charge not exceeding 1% of the deficiency.

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 Kenya or an office outside Kenya of any bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") ; Section 19(2)(e) Kenya treasury bills and bonds of a maturity not exceeding ninety-one days which are freely marketable and rediscountable at the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 19(2)(f) such other assets as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may specify. Section 19(3) Any institution ("a bank or financial institution or a mortgage finance company;") which fails to comply, within such time as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may prescribe, with any requirement of subsection (1) shall be liable to pay, on being called upon to do so by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , a penalty interest charge not exceeding one per cent of the amount of the deficiency for every day on which the offence continues.
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RESERVES AND DIVIDENDS - 20. Restrictions on dividends
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Institutions incorporated in Kenya (banks, financial institutions or mortgage finance companies) must not pay dividends or make other distributions to shareholders until capitalized expenditure is written off and provisions are made for loans, advances and other assets in accordance with subsection (2).

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 ();") .

Part IX

REPRESENTATIVE OFFICES OF FOREIGN INSTITUTIONS

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REPRESENTATIVE OFFICES OF FOREIGN INSTITUTIONS - 43. Representative offices of foreign institutions
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The Central Bank may authorize foreign banks or financial institutions to open representative offices in Kenya under conditions; the Central Bank may require information, issue directions and order closure if directions are not followed, and representative offices must provide requested information within specified or agreed periods.

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 Bank may require a representative office ("an office established in Kenya under the provision of Part IX;") to furnish such information as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may require at such time and in such manner as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may direct. Section 43(3) Where a representative office ("an office established in Kenya under the provision of Part IX;") is required to furnish information under subsection (2) , it shall furnish that information and any supplemental material that may be required as a result of that information within the period specified in the direction or within such reasonable period thereafter as may be agreed. Section 43(4) The Central Bank may at any time, if it appears to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") that a representative office ("an office established in Kenya under the provision of Part IX;") is engaged in banking or financial business or that the affairs of a representative office ("an office established in Kenya under the provision of Part IX;") are being conducted contrary to any condition of an authority granted under subsection (1) or in a manner detrimental to banking or financial business in Kenya, issue directions to the representative office ("an office established in Kenya under the provision of Part IX;") to take such corrective action as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") considers to be necessary within such period as may be specified in the directions; and, if the representative office ("an office established in Kenya under the provision of Part IX;") fails to comply with such directions, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may order that the affairs of a representative office ("an office established in Kenya under the provision of Part IX;") in Kenya be wound up and the office closed within such time as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may direct. [Act No. 9 of 2006 , s. 16.]

Part V

ACCOUNTS AND AUDIT

20A
ACCOUNTS AND AUDIT - 20A. Financial year
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Every bank, financial institution or mortgage finance company must have a financial year of twelve months ending 31st December; if an institution's financial year differs it must change it within twelve months of this section's commencement.

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.]
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ACCOUNTS AND AUDIT - 21. Form of accounts
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Institutions (banks, financial institutions, mortgage finance companies) must record and keep all entries and accounts in English and use the system of numerals employed in Government accounts.

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.]
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ACCOUNTS AND AUDIT - 22. Accounts to be exhibited
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Requires exhibition in offices/branches in Kenya of the last audited financial statements and officers' full names, publication of balance sheet and audited income statements within three months after financial year end, and that financial statements conform with international financial reporting standards.

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 No. 8 of 1997 , s. 58, Act No. 57 of 2012 , s. 44.]
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ACCOUNTS AND AUDIT - 23. Submission of accounts tothe Central Bank
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Institutions defined as banks, financial institutions or mortgage finance companies must submit audited balance sheets, profit and loss accounts and the auditor’s report to the Central Bank within three months after the end of their financial year; institutions with foreign incorporation or foreign branches must also submit consolidated audited accounts for the whole institution.

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 finance company;") as a whole. [Act No. 13 of 1994 , s. 10, Act No. 8 of 2008 , s. 68.]
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ACCOUNTS AND AUDIT - 24. Appointment of auditors
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Institutions (banks, financial institutions or mortgage finance companies) must annually appoint an auditor approved by the Central Bank; appointed auditors must audit and report on annual accounts and comply with Central Bank requests, and the Central Bank has powers to appoint or remove auditors and to arrange meetings.

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 by the Central Bank of Kenya Act ();") may consider necessary; Section 24(3)(b) to carry out any other special investigation; and Section 24(3)(c) to submit a report on any of the matters referred to in paragraphs (a) and (b) , Section 24(4)(a) there has been a serious breach of or non-compliance with the provisions of this Act, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ) or the regulations, guidelines or other matters prescribed by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 24(4)(b) a criminal offence involving fraud or other dishonesty has been committed by the institution ("a bank or financial institution or a mortgage finance company;") or any of its officers or employees; Section 24(4)(c) losses have been incurred which reduce 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 the institution ("a bank or financial institution or a mortgage finance company;") by fifty per cent or more; Section 24(4)(d) serious irregularities have occurred which may jeopardize the security of depositors or creditors of the institution ("a bank or financial institution or a mortgage finance company;") ; or Section 24(4)(e) he is unable to confirm that the claims of depositors and creditors of the institution ("a bank or financial institution or a mortgage finance company;") are capable of being met out of the assets of the institution ("a bank or financial institution or a mortgage finance company;") , Section 24(5) The Central Bank may arrange trilateral meetings with an institution ("a bank or financial institution or a mortgage finance company;") and its auditor from time to time, to discuss matters relevant to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ’s supervisory responsibilities which have arisen in the course of the statutory audit of the institution ("a bank or financial institution or a mortgage finance company;") including relevant aspects of the institution ("a bank or financial institution or a mortgage finance company;") ’s business, its accounting and control system and its annual accounts. Section 24(6) If an auditor of an institution ("a bank or financial institution or a mortgage finance company;") fails to comply with the requirements of this Act, the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may remove him from office and appoint another person in his place. Section 24(7)(a) a director, officer or employee of that institution ("a bank or financial institution or a mortgage finance company;") ; or Section 24(7)(b) a person who is a partner of a Director, officer or employee of that institution ("a bank or financial institution or a mortgage finance company;") ; or Section 24(7)(c) a person who is an employer or employee of a director, officer or employee of that institution ("a bank or financial institution or a mortgage finance company;") ; or Section 24(7)(d) a person who is a director, officer or employee of an associate of that institution ("a bank or financial institution or a mortgage finance company;") ; or Section 24(7)(e) a person who, by himself, or his partner or his employee, regularly performs the duties of secretary or book-keeper for that institution ("a bank or financial institution or a mortgage finance company;") ; or Section 24(7)(f) a firm or member of a firm of auditors of which any partner or employee falls within the above categories.
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ACCOUNTS AND AUDIT - 25. Change of auditors to be notified tothe Central Bank
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Institutions (banks, financial institutions or mortgage finance companies) must not remove or change their auditor without the prior written approval of the Central Bank; an institution aggrieved by the Central Bank's decision may appeal to the Cabinet Secretary within fourteen days.

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 responsible for matters relating to Finance;") under subsection (3) shall be final. [Act No. 13 of 1994 , s. 11.]
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ACCOUNTS AND AUDIT - 26. Auditor’s duty of confidence
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An auditor of an institution is permitted to communicate in good faith to the Central Bank information or opinions relevant to the Central Bank’s functions without that communication being treated as a contravention of duties.

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;") .

Part VI

INFORMATION AND REPORTING REQUIREMENTS

27
INFORMATION AND REPORTING REQUIREMENTS - 27. Collection of information by Central Bank
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The Central Bank must collect data and other information necessary for supervision and may require institutions to submit periodic statistical and other returns.

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.]
28
INFORMATION AND REPORTING REQUIREMENTS - 28. Furnishing of information
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The Central Bank may require banks, financial institutions or mortgage finance companies and their agencies to furnish it information.

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 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;") and its individual subsidiaries; Section 28(3)(c) the way in which internal risk management is organized and conducted within 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;") ; and Section 28(3)(d) the corporate, financial and other linkages existing between members 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;") .
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INFORMATION AND REPORTING REQUIREMENTS - 29.Cabinet Secretarymay require further information
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The Cabinet Secretary may require the Central Bank or a bank, financial institution or mortgage finance company to furnish information to him at times and in the manner he directs.

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.]
30
INFORMATION AND REPORTING REQUIREMENTS - 30. Time to furnish information
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Where the Central Bank or a bank/financial institution/mortgage finance company is required to furnish information under this Part, it must furnish that information and any supplemental material within the period specified in this Part or the relevant direction or within such reasonable period thereafter as may be agreed.

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.
31
INFORMATION AND REPORTING REQUIREMENTS - 31. Publication of information
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Section 31 permits the Central Bank and the Cabinet Secretary to publish information furnished under the Act, but generally prohibits persons from disclosing information obtained through performing duties under the Act; some disclosures (including to specified authorities and foreign counterparts) are allowed and publication that would disclose a person's financial affairs requires that person's written consent.

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 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:") , fraud investigations 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:") , domestic or foreign counter parts, or the Financial Reporting Centre, where such information is reasonably required for the proper discharge of the functions of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ). Section 31(3)(b) the Deposit Protection Fund Board ("the Deposit Protection Fund Board established by;") institutions licensed under this Act and institutions licensed under the Microfinance Act ( Cap. 493C ), institutions licensed under the Sacco Societies ( Cap. 490B ), institutions registered under the Co-operative Societies Act ( Cap. 490 ), public utility companies and any other institution mandated to share credit information under any written law shall, in the ordinary course of business and in such manner and to such extent as the Cabinet Secretary may, in regulations, prescribe, exchange such information on non-performing loans as may, from time to time, be specified by the Central Bank in guidelines under section 33 (4). Section 31(3)(c) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") and institutions licensed under this Act and institutions licensed under the Microfinance Act ( Cap. 493C ) may, in the ordinary course of business, in such manner and to such extent as the Cabinet Secretary may, in regulations prescribe, exchange such other information as is reasonably required for the proper discharge of their functions. Section 31(4) Without prejudice to the generality of subsection (3)(b) or (c) , regulations under that subsection may provide for the establishment and operation of credit reference bureaus, for the purpose of collecting prescribed credit information on clients of institutions licensed under this Act, and institutions licensed under the Microfinance Act ( Cap. 493C ), and the Sacco Societies Act ( Cap. 490B ), and public utility companies and any other institution mandated to share credit information under any written law and disseminating it amongst such institutions for use in the ordinary course of business, subject to such conditions or limitations as may be prescribed. Section 31(5)(a) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 31(5)(b) the Kenya Deposit Insurance Corporation; Section 31(5)(c) an institution ("a bank or financial institution or a mortgage finance company;") licensed under this Act or the Microfinance Act ( Cap. 493C ); Section 31(5)(d) a credit reference bureau established under subsection (4) ; Section 31(5)(da) institutions licensed under the Sacco Societies Act ( Cap. 490B ); Section 31(5)(db) institutions registered under the Co-operative Societies Act ( Cap. 490 ); Section 31(5)(dc) public utility companies; Section 31(5)(dd) any institution ("a bank or financial institution or a mortgage finance company;") mandated to share credit information under any written law; Section 31(5)(e) any person carrying out an inspection under section 32 ; or Section 31(5)(f) any person, authority, 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:") or entity referred to in subsection (3)(a) or any other person or authority which may be authorized under any written law or otherwise to share information, Section 31(6)(a) regulators or supervisory authorities and credit reference bureaus or entities performing similar roles; Section 31(6)(b) institutions and credit reference bureaus or entities performing similar roles; Section 31(6)(c) regulators or supervisory authorities and institutions; Section 31(6)(d) there is a mutual legal framework for the sharing of credit information; and Section 31(6)(d)(i) there is a mutual legal framework for the sharing of credit information; and Section 31(6)(d)(ii) the credit information is required for the discharge of a lawful duty or the performance of a lawful purpose by the person requesting for the information.
31A
INFORMATION AND REPORTING REQUIREMENTS - 31A. Disclosure of information on loans
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A bank or financial institution must disclose all charges and terms related to a loan before granting the loan to a borrower.

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.]
31B
INFORMATION AND REPORTING REQUIREMENTS - 31B. Information on next of kin
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Banks and financial institutions licensed under the Act must keep and annually update a register of next of kin for all accounts; contravention is an offence punishable by a fine not exceeding one million shillings per defaulting account.

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 subsection (1) commits an offence and shall be liable, for each account in which there is default, to a fine not exceeding one million shillings. [Act No. 10 of 2018 , s. 63.]

Part VII

INSPECTION AND CONTROL OF INSTITUTIONS

32
INSPECTION AND CONTROL OF INSTITUTIONS - 32. Inspection of institutions
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The Central Bank may inspect institutions at any time, must inspect if directed by the Cabinet Secretary, inspectors may copy documents and must submit reports highlighting breaches and irregularities; the Central Bank may assist investigative agencies.

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 ). Section 32(3) The person making the inspection shall submit his report to the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; and the report shall draw attention to any breach or non-observance of the requirements of this Act and any regulations made thereunder, any irregularity in the manner of conduct of the business of the institution ("a bank or financial institution or a mortgage finance company;") inspected, any apparent mismanaging of the business or lack of management skills in that institution ("a bank or financial institution or a mortgage finance company;") and any other matter revealed or discovered in the course of the inspection warranting, in the opinion of the person making the inspection, remedial action or further investigation. Section 32(4) The Central Bank may assist investigative agencies or other authorities in matters related to suspected fraud or malfeasance in institutions by identifying such matters for referral to or at the request of, such agencies or authorities. Section 32(5)(a) amongst the bodies set out in the Third Schedule; or Section 32(5)(b) any other entity or entities with expertise in the relevant field, Section 32(6) This section shall apply for anti-money laundering, counter-terrorism financing and countering proliferation financing purposes. [Act No. 8 of 2009 , s. 60, Act No. 57 of 2012 , s. 47, Act No. 19 of 2015 , s. 81, Act No. 10 of 2023 , Sch.]
32A
INSPECTION AND CONTROL OF INSTITUTIONS - 32A. Vetting of officials
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The Central Bank may, from time to time when it deems necessary, carry out assessments of the professional and moral suitability of persons managing or controlling institutions; where satisfied it shall certify in writing to the institution.

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 manage or control an institution ("a bank or financial institution or a mortgage finance company;") , shall be deemed to be disqualified from holding office under section 48 . [Act No. 10 of 2006 , s. 45.]
32B
INSPECTION AND CONTROL OF INSTITUTIONS - 32B. Examination and control of Groups
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The Central Bank may require legal or management structural changes to a group or banking group if it finds those structures impede its supervisory responsibilities.

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
33
INSPECTION AND CONTROL OF INSTITUTIONS - 33. Powers of Central Bank to advise and direct
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The Central Bank has powers to advise, recommend and issue directions to banks and financial institutions, to appoint advisors or enforcement authorities, and to suspend investments, control or transactions; institutions must comply with directions and produce evidence; failure to comply is an offence with additional penalties per day.

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 of this Act, any regulations made thereunder or any other written law or regulations; Section 33(1)(b)(iii) in any case to which paragraph (b) applies, issue directions to the institution ("a bank or financial institution or a mortgage finance company;") , officer or other person to cease such practice; Section 33(1)(b)(iv) appoint a person, suitably qualified and competent in the opinion of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , to advise and assist the institution ("a bank or financial institution or a mortgage finance company;") generally or for the purposes of implementing any directions under subparagraphs (ii) and (iii) and the advice of a person so appointed shall have the same force and effect as a direction made under subparagraphs (ii) and (iii) and shall be deemed to be a direction of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under this section. Section 33(1A)(a) that any member of a group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") other than an institution ("a bank or financial institution or a mortgage finance company;") has committed any violation of this Act; or Section 33(1A)(b) that the activities of any such member are having a detrimental impact on the institution ("a bank or financial institution or a mortgage finance company;") or may jeopardize the interest of depositors, Section 33(1B) The Central Bank may appoint a competent authority ("any of the bodies set out in the Third Schedule;") from amongst the bodies set out in the Third Schedule or any other entity with expertise in the relevant field to carry out the enforcement of the direction issued under subsection (1A) . Section 33(1C)(a) suspend any further investment by the institution ("a bank or financial institution or a mortgage finance company;") in a subsidiary company; Section 33(1C)(b) suspend the exercise of a non-operating holding company ’s control of the institution ("a bank or financial institution or a mortgage finance company;") ; Section 33(1C)(c) suspend transactions between any associated entity and the institution ("a bank or financial institution or a mortgage finance company;") ; or Section 33(1C)(d) suspend participation of any person in the affairs of the institution ("a bank or financial institution or a mortgage finance company;") . Section 33(2) The Central Bank shall, before issuing a direction under subsection (1) , serve upon the institution ("a bank or financial institution or a mortgage finance company;") , officer or other person, a notice of such intent specifying the reasons therefor and requiring the institution ("a bank or financial institution or a mortgage finance company;") , officer or other persons, within such period as may be specified in the notice, to show cause why such direction should not be issued. Section 33(3) An institution ("a bank or financial institution or a mortgage finance company;") which receives a direction under the provisions of this section shall comply with the direction within such period as may be specified in the direction and, if so required, shall produce evidence that it has done so. Section 33(4)(a) the standards to be adhered to by an institution ("a bank or financial institution or a mortgage finance company;") in the conduct of its business in Kenya or in any country where a branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") or subsidiary of the institution ("a bank or financial institution or a mortgage finance company;") is located; and Section 33(4)(b) guidelines to be adhered to by institutions in order to maintain a stable and efficient banking and financial system. Section 33(5) A person who fails to comply with any direction under this section commits an offence and shall, in addition to the penalty prescribed under section 49 , be liable to such additional penalty as may be prescribed, for each day or part thereof during which the offence continues. [Act No. 5 of 1998 , s. 58, Act No. 4 of 2012 , s. 44, Act No. 57 of 2012 , s. 49.]
33A
INSPECTION AND CONTROL OF INSTITUTIONS - 33A. Powers upon audit or inspection report
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Allows restricting, suspending or prohibiting the payment of dividends by the institution (a bank, financial institution, or mortgage finance company).

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;") ;
33B
INSPECTION AND CONTROL OF INSTITUTIONS - 33B.[Repealed by ActNo. 23 of 2019, s. 45.]
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Section 33B was repealed by ActNo. 23 of 2019, s. 45.

Section 33B.[Repealed by ActNo. 23 of 2019, s. 45.]
33C
INSPECTION AND CONTROL OF INSTITUTIONS - 33C. Power of Central Bank to prescribe conditions on deposits or withdrawals
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The Central Bank must make regulations prescribing conditions on customer deposits and withdrawals in banks and financial institutions; it must do so within thirty days of the Act coming into force, and other persons are prohibited from making those regulations; existing guidelines cease within fourteen days of the new regulations.

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.]
33D
INSPECTION AND CONTROL OF INSTITUTIONS - 33D. Powers on anti-money laundering, combating the financing of terrorism and countering proliferation financing matters
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The Central Bank must regulate, supervise and enforce anti-money laundering, counter-terrorist financing and counter-proliferation-financing compliance by reporting institutions and is given specified supervisory powers (vetting, inspections, surveillance, consolidated supervision, compelling documents, imposing sanctions, issuing rules, sharing information, and taking necessary enforcement action).

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 mortgage finance company;") and its group ("a non-operating holding company, its subsidiaries and all associated companies of the parent or its subsidiaries;") ; Section 33D(2)(e) compel the production of any document or information the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may require for the purpose of discharging its supervisory mandate under the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ); Section 33D(2)(f) impose monetary, civil or administrative sanctions for violations related to anti-money laundering, combating the financing of terrorism or countering proliferation financing purposes; Section 33D(2)(g) issue regulations, guidelines, directions, rules or instructions for anti-money laundering, combating the financing of terrorism and countering proliferation financing purposes; Section 33D(2)(h) co-operate and share information for anti-money laundering, combating the financing of terrorism and countering proliferation financing purposes; and Section 33D(2)(i) take such action as is necessary to supervise and enforce compliance by reporting institutions in line with the provisions of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ) and any regulations, guidelines, rules, instruction or direction made or issued thereunder. Section 33D(3) For purposes of this section, “reporting institution ("a bank or financial institution or a mortgage finance company;") ” has the meaning assigned to it under section 2 of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ). [Act No. 10 of 2023 , Sch.]
33E
INSPECTION AND CONTROL OF INSTITUTIONS - 33E. Penalties for violations relating to money laundering, terrorism financing
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No institution (including banks, financial institutions or mortgage finance companies), directors, officers, employers, agents or any other person must violate or fail to comply with the Proceeds of Crime and Anti-Money Laundering Act or instruments issued under it; penalties are provided for legal persons, natural persons, and daily continuing breaches.

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.
34
INSPECTION AND CONTROL OF INSTITUTIONS - 34. Powers of Central Bank to intervene in management
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Section 34 gives the Central Bank power to intervene in the management of a bank, financial institution or mortgage finance company in specified circumstances, and allows the Central Bank to direct actions and restrict the institution's activities.

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 ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , warrants the exercise of the relevant power in the interests of the institution ("a bank or financial institution or a mortgage finance company;") or its depositors or other creditors; Section 34(1)(e) if the institution ("a bank or financial institution or a mortgage finance company;") is significantly undercapitalized ; or Section 34(1)(f) to submit a capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") restoration plan or a plan to resolve all deficiencies as directed under section 33A ; or Section 34(1)(f)(i) to submit a capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") restoration plan or a plan to resolve all deficiencies as directed under section 33A ; or Section 34(1)(f)(ii) to add more capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") , and it fails, neglects or refuses to comply, with an order or to implement a plan of correction. Section 34(2)(a) repealed by ActNo. 10 of 2012, s. 75(1); Section 34(2)(b) appoint Kenya Deposit Insurance Corporation to assume the management control and conduct of the affairs and business of an institution ("a bank or financial institution or a mortgage finance company;") and to exercise all the powers of the institution ("a bank or financial institution or a mortgage finance company;") to the exclusion of its board of directors including the use of its corporate seal; Section 34(2)(c) remove any officer or employee of an institution ("a bank or financial institution or a mortgage finance company;") who, in the opinion of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") , has caused or contributed to any contravention of any provision of this Act or any regulations made thereunder, or to any deterioration in the financial stability of the institution ("a bank or financial institution or a mortgage finance company;") , or has been guilty of conduct detrimental to the interests of depositors or other creditors of the institution ("a bank or financial institution or a mortgage finance company;") ; Section 34(2)(d) appoint a competent person familiar with the business of the institution ("a bank or financial institution or a mortgage finance company;") to its board of directors to hold office as a director, who shall not be capable of being removed from office without the approval of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") ; Section 34(2)(e) by notice in the Gazette , revoke or cancel any existing power of attorney, mandate, appointment or other authority by the institution ("a bank or financial institution or a mortgage finance company;") in favour of any officer or employee or any other person; Section 34(2)(f) restrict the institution ("a bank or financial institution or a mortgage finance company;") from engaging in new foreign exchange business; Section 34(2)(g) prohibit the institution ("a bank or financial institution or a mortgage finance company;") from engaging in new off-balance sheet transactions; and Section 34(2)(h) prohibit the institution ("a bank or financial institution or a mortgage finance company;") from engaging any new agents or direct the institution ("a bank or financial institution or a mortgage finance company;") to terminate any 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:") arrangement. Section 34(3) Repealed by ActNo. 10 of 2012, s. 75(1). Section 34(3A) Deleted by ActNo. 14 of 2015, s. 37. Section 34(3B) Deleted by ActNo. 14 of 2015, s. 37. Section 34(4) Repealed by ActNo. 10 of 2012, s. 75(1). Section 34(5) Repealed by ActNo. 10 of 2012, s. 75(1). Section 34(6) Repealed by ActNo. 10 of 2012, s. 75(1). Section 34(7) If any officer or employee of an institution ("a bank or financial institution or a mortgage finance company;") removed under the provisions of subsection (2)(b) is aggrieved by the decision, he may apply to the High Court and the Court may confirm, reverse or modify the decision and make such other in the circumstances as it thinks just; and pending the determination of any application or appeal therefrom, the order of removal shall remain in effect. Section 34(8) Neither the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") nor any officer or employee thereof nor any manager nor any other person appointed, designated or approved by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under the provisions of this Part shall be liable in respect of any act or omission done in good faith by such officer , employee, manager or other person in the execution of the duties undertaken by him. [Act No. 13 of 1994 , s. 12, Act No. 4 of 1999 , s. 86, Act No. 9 of 2006 , s. 13, Act No. 10 of 2010 , s. 67, Act No. 57 of 2012 , s. 50, Act No. 10 of 2012 , s. 75(1), Act No. 14 of 2015 , s. 37, Act No. 38 of 2016 , s. 52.]
34A
INSPECTION AND CONTROL OF INSTITUTIONS - 34A. Voluntary liquidation
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An institution (bank, financial institution or mortgage finance company) may voluntarily liquidate itself with Central Bank approval if it can meet all its liabilities; the Central Bank may approve if satisfied as to solvency. Upon approval the institution must cease operations except for activities to realise and preserve assets and settle obligations; shareholders remain liable for uncalled capital while in liquidation; the institution must pay depositors as soon as practicable and then rank other creditors under the Insolvency Act.

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 realisation, conservation and preservation of its assets and settlement of its obligations. Section 34A(5) While the institution ("a bank or financial institution or a mortgage finance company;") is in liquidation under this section, the liability of the shareholders of the institution ("a bank or financial institution or a mortgage finance company;") for uncalled subscriptions to the capital ("paid-up share capital or, in the case of an institution incorporated outside Kenya, its assigned capital;") stock of the institution ("a bank or financial institution or a mortgage finance company;") continues. Section 34A(6) The institution ("a bank or financial institution or a mortgage finance company;") shall discharge its liability to its depositors as soon as practicable after the commencement of the liquidation and shall then rank all other creditors in accordance with the Insolvency Act ( Cap. 53 ). [Act No. 4 of 1999 , s. 87, Act No. 9 of 2006 , s. 14, Act No. 14 of 2015 , s. 38, Act No. 19 of 2015 , s. 82.]
35
INSPECTION AND CONTROL OF INSTITUTIONS - 35. Liquidation of insolvent institutions
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The Central Bank may appoint the Deposit Protection Fund Board as liquidator of an insolvent bank or similar institution; the Board when liquidator is subject to Central Bank supervision and may exercise liquidation powers only as authorised by the Central Bank; the Central Bank may apply to the High Court to replace an existing liquidator with the Board.

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 powers under this section; or Section 35(4)(b) has failed to exercise its powers within such period, not exceeding three months, as the High Court may specify. Section 35(5) When a liquidator (other than the Board ("the Deposit Protection Fund Board established by;") ) has been appointed as liquidator of an institution ("a bank or financial institution or a mortgage finance company;") , the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, at any time, apply to the High Court for an order that the liquidator be removed and the Board ("the Deposit Protection Fund Board established by;") be appointed as liquidator instead. Section 35(6) If the High Court appoints the Board ("the Deposit Protection Fund Board established by;") instead of the liquidator, the provisions of the Insolvency Act ( Cap. 53 ), apply to a liquidation by the Board but only to the extent that they are not inconsistent with this Act and any regulations made under it. Section 35(7)(a) carry on the business of the institution ("a bank or financial institution or a mortgage finance company;") so far as may be necessary for its beneficial liquidation; Section 35(7)(b) appoint an advocate to assist it in the performance of its functions; Section 35(7)(c) pay any classes of creditors in full; Section 35(7)(d) enter into any compromise or arrangement with creditors or persons claiming to be creditors; Section 35(7)(e) all calls and liabilities to call, debts and liabilities capable of resulting in debts, and all claims (whether present or future, certain or contingent, or ascertained or sounding only in damages) subsisting or alleged to be subsisting between the institution ("a bank or financial institution or a mortgage finance company;") and a contributory or other person who may have a liability to the institution ("a bank or financial institution or a mortgage finance company;") ; and Section 35(7)(e)(i) all calls and liabilities to call, debts and liabilities capable of resulting in debts, and all claims (whether present or future, certain or contingent, or ascertained or sounding only in damages) subsisting or alleged to be subsisting between the institution ("a bank or financial institution or a mortgage finance company;") and a contributory or other person who may have a liability to the institution ("a bank or financial institution or a mortgage finance company;") ; and Section 35(7)(e)(ii) all questions affecting the assets or liquidation of the institution ("a bank or financial institution or a mortgage finance company;") , Section 35(7)(f) take security for the discharge of any such call, debt, liability or claim and give a complete discharge for it. Section 35(8)(a) set off payment made to a protected depositor out of the fund against any dividend subsequently determined as payable to such depositor; Section 35(8)(b) recover interest payable to the institution ("a bank or financial institution or a mortgage finance company;") on loans, overdrafts and other credit facilities outstanding as at the date of liquidation; Section 35(8)(c) offset deposits and any other liabilities to the institution ("a bank or financial institution or a mortgage finance company;") 's customers against any loans or debts owed to the institution ("a bank or financial institution or a mortgage finance company;") as at the date of liquidation; Section 35(8)(d) invest surplus funds in the liquidation account that are not immediately required for the purpose of financing day to day operations in short-term placements with reputable institutions approved by the Board ("the Deposit Protection Fund Board established by;") or in such Government securities as the Board ("the Deposit Protection Fund Board established by;") may determine. Section 35(9)(a) give to the liquidator all reasonable assistance in connection with the liquidation; Section 35(9)(b) appear before the liquidator for examination concerning matters relevant to the liquidation; Section 35(9)(c) produce any records or documents that relate to the affairs of the institution ("a bank or financial institution or a mortgage finance company;") being liquidated. Section 35(10) In performing its functions under this section, the Board ("the Deposit Protection Fund Board established by;") is subject to the supervision of the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 35(11) When the Board ("the Deposit Protection Fund Board established by;") has been appointed as liquidator in respect of an institution ("a bank or financial institution or a mortgage finance company;") , the powers of the Board ("the Deposit Protection Fund Board established by;") are exercisable only if and to the extent authorised by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 35(12) When the High Court has appointed a liquidator in respect of an institution ("a bank or financial institution or a mortgage finance company;") , the powers of the liquidator are exercisable only if and to the extent authorised by the High Court. Section 35(13) On the application of any interested party, the High Court may, if it considers it appropriate to do so, appoint a liquidation committee having the same powers as a liquidation committee appointed under Part VI of the Insolvency Act ( Cap. 53 ). Section 35(14)(a) apply relevant provisions of the Insolvency Act ( Cap. 53 ), with or without modifications; and Section 35(14)(b) include provision as to the manner and time in which depositors and other creditors of the institution ("a bank or financial institution or a mortgage finance company;") (preferential or otherwise) are required to submit proofs of their debts to the Board ("the Deposit Protection Fund Board established by;") . Section 35(15)(a) it is unable to pay its debts within the meaning of section 383 of the Insolvency Act ( Cap. 53 ); Section 35(15)(b) a liquidation order is made against it, or a resolution for creditors' voluntary liquidation is passed, under Part VI of the Insolvency Act ( Cap. 53 ); Section 35(15)(c) it is unable to pay amounts due and payable to its depositors; or Section 35(15)(d) the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") determines on investigation that the value of its assets is less than the amount of its liabilities.
35A
INSPECTION AND CONTROL OF INSTITUTIONS - 35A.[Repealed by ActNo. 14 of 2015, s. 39.]
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Section 35A was repealed by ActNo. 14 of 2015, s. 39.

Section 35A.[Repealed by ActNo. 14 of 2015, s. 39.]
35B
INSPECTION AND CONTROL OF INSTITUTIONS - 35B. Power to place institutions in administration in certain circumstances
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Section 35B gives the Central Bank the power to apply to the High Court to replace an administrator with the Deposit Protection Fund Board, states that the Board's appointment is equivalent to a High Court administrator appointment, limits the Board's powers to those authorised by the Central Bank, and empowers the Cabinet Secretary to make regulations for administration.

Section 35B. Power to place institutions in administration in certain circumstances Section 35B(1)(a) the institution ("a bank or financial institution or a mortgage finance company;") is or is, likely to become unable to pay its debts; and Section 35B(1)(b) the administration order is reasonably likely to achieve at least one of the objectives of administration. Section 35B(2)(a) to maintain the institution ("a bank or financial institution or a mortgage finance company;") as a going concern; Section 35B(2)(b) to achieve a better outcome for the institution ("a bank or financial institution or a mortgage finance company;") 's creditors as a whole than would likely to be the case if the institution ("a bank or financial institution or a mortgage finance company;") were liquidated (without first being under administration); Section 35B(2)(c) to realise the property of the institution ("a bank or financial institution or a mortgage finance company;") in order to make a distribution to one or more secured or preferential creditors. Section 35B(3) The appointment of the Board ("the Deposit Protection Fund Board established by;") as administrator of an institution ("a bank or financial institution or a mortgage finance company;") has the same effect as the appointment by the High Court of an administrator of a company under Division 3 of Part VIII of the Insolvency Act ( Cap. 53 ). Section 35B(4)(a) if the Board ("the Deposit Protection Fund Board established by;") has already been appointed as its administrator; or Section 35B(4)(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 35B(5)(a) has certified that it does not intend to exercise its powers under this section; or Section 35B(5)(b) has failed to exercise its powers within such period, not exceeding three months, as the High Court may specify. Section 35B(6) When an administrator (other than the Board ("the Deposit Protection Fund Board established by;") ) has been appointed in respect of an institution ("a bank or financial institution or a mortgage finance company;") , the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, at any time, apply to the High Court for an order that the administrator be removed and the Board ("the Deposit Protection Fund Board established by;") be appointed as administrator instead. Section 35B(7) If the High Court removes the administrator and appoints the Board ("the Deposit Protection Fund Board established by;") instead, the provisions of Part VIII of the Insolvency Act ( Cap. 53 ), apply to an administration by the Board but only to the extent that they are not inconsistent with this Act and any regulations made under it. Section 35B(8) A receiver or receiver and manager may not be appointed in respect of an institution ("a bank or financial institution or a mortgage finance company;") and any provision purporting to confer power to appoint such a receiver or a receiver and manager is taken to be a power to appoint an administrator under Part VIII of the Insolvency Act ( Cap. 53 ). Section 35B(9) If, before the commencement of the Companies and Insolvency Legislation (Consequential Amendments) Act, a receiver or receiver and manager of an institution ("a bank or financial institution or a mortgage finance company;") has been appointed in respect of an institution ("a bank or financial institution or a mortgage finance company;") , the receiver, or receiver and manager, is taken to be an administrator appointed under Part VIII of the Insolvency Act ( Cap. 53 ). Section 35B(10) When the Board ("the Deposit Protection Fund Board established by;") is appointed as administrator in respect of an institution ("a bank or financial institution or a mortgage finance company;") are exercisable only if and to the extent authorised by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 35B(11) The powers of an administrator (other than the Board ("the Deposit Protection Fund Board established by;") ) appointed or taken to have been appointed in respect of an institution ("a bank or financial institution or a mortgage finance company;") are exercisable only if and to the extent authorised by the High Court. Section 35B(12)(a) to give to the liquidator all reasonable assistance in connection with the administration; Section 35B(12)(b) to appear before the Board ("the Deposit Protection Fund Board established by;") for examination concerning matters relevant to the administration; Section 35B(12)(c) to produce any records or documents that relate to the affairs of the institution ("a bank or financial institution or a mortgage finance company;") under administration. Section 35B(13)(a) any person who is or has at any time been a director, managing director, secretary, principal officer , manager, officer or employee, agent, accountant or auditor of the institution ("a bank or financial institution or a mortgage finance company;") ; Section 35B(13)(b) any person who has custody of funds or other assets of the institution ("a bank or financial institution or a mortgage finance company;") under administration. Section 35B(14) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may make regulations generally for carrying out the administration of an institution ("a bank or financial institution or a mortgage finance company;") under this section, and in doing so may apply relevant provisions of the Insolvency Act ( Cap. 53 ), with or without modifications. [Act No. 19 of 2015 , s. 84.]
35C
INSPECTION AND CONTROL OF INSTITUTIONS - 35C. Right of appeal in respect ofBoard's exercise of powers under section35
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An interested person may apply to the High Court to challenge the Board's exercise of a power; the Court may quash decisions or direct the Board, and the Board is entitled to be served and appear as respondent.

Section 35C. Right of appeal in respect ofBoard's exercise of powers under section35 Section 35C(1) Any interested person who is dissatisfied with the exercise by the Board ("the Deposit Protection Fund Board established by;") of a power conferred on it by section 35 may apply to the High Court for an order or orders under subsection (2) . Section 35C(2)(a) an order quashing any decision of the Board ("the Deposit Protection Fund Board established by;") purporting to be made in the exercise of the power, and any action taken as a result of that decision; Section 35C(2)(b) an order directing the Board ("the Deposit Protection Fund Board established by;") to exercise the power in such a way as the Court determines, subject to such terms as the Court considers appropriate. Section 35C(3) The Board ("the Deposit Protection Fund Board established by;") is entitled to be served with a copy of an application made under subsection (1) and to appear as respondent at the hearing of the application. [Act No. 19 of 2015 , s. 84.]
35D
INSPECTION AND CONTROL OF INSTITUTIONS - 35D. Offences under sections35and35B
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It is an offence for a person to (a) refuse or fail to comply with a liquidator's or administrator's requirement applicable to them, (b) obstruct or hinder a liquidator or administrator, (c) knowingly give false or misleading information to them, or (d) knowingly make a false or misleading statement when examined; continued refusal after conviction under (a) incurs a further daily offence punishable by a fine not exceeding one hundred thousand shillings.

Section 35D. Offences under sections35and35B Section 35D(1)(a) refuses or fails to comply with a requirement of a liquidator appointed under section 35 , or of an administrator appointed under section 35B , that is applicable to the person, to the extent to which the person is able to comply with it; Section 35D(1)(b) obstructs or hinders such a liquidator or administrator in the exercise of the powers conferred under this Act; Section 35D(1)(c) provides information, or makes a false statement, to such a liquidator or administrator knowing it to be false or misleading in any material respect; or Section 35D(1)(d) when appearing before such a liquidator for examination in accordance with such a requirement, makes a statement knowing it to be false or misleading in a material respect, Section 35D(2) If, after being convicted of an offence under subsection (1)(a) , a person continues to refuse or fail to comply with the relevant requirement, the person commits a further offence on each day or part of a day on which the refusal or failure continues and on conviction is liable to a fine not exceeding one hundred thousand shillings for each such offence. [Act No. 19 of 2015 , s. 84.]

Part VIII

THE DEPOSIT PROTECTION FUND

36
THE DEPOSIT PROTECTION FUND - 36.[Repealed by ActNo. 10 of 2012, s. 75(1).]
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Section 36 was repealed by ActNo. 10 of 2012, s. 75(1).

Section 36.[Repealed by ActNo. 10 of 2012, s. 75(1).]
36A
THE DEPOSIT PROTECTION FUND - 36A.[Repealed by ActNo. 14 of 2015, s. 40.]
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Section 36A is repealed.

Section 36A.[Repealed by ActNo. 14 of 2015, s. 40.]
36B
THE DEPOSIT PROTECTION FUND - 36B.[Repealed by ActNo. 14 of 2015, s. 41.]
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Section 36B was repealed by ActNo. 14 of 2015, s. 41.

Section 36B.[Repealed by ActNo. 14 of 2015, s. 41.]
36C
THE DEPOSIT PROTECTION FUND - 36C.[Repealed by ActNo. 14 of 2015, s. 42.]
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Section 36C was repealed by ActNo. 14 of 2015, s. 42.

Section 36C.[Repealed by ActNo. 14 of 2015, s. 42.]
37
THE DEPOSIT PROTECTION FUND - 37.[Repealed by ActNo. 10 of 2012, s. 75(1).]
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Section 37 was repealed by ActNo. 10 of 2012, s. 75(1).

Section 37.[Repealed by ActNo. 10 of 2012, s. 75(1).]
38
THE DEPOSIT PROTECTION FUND - 38.[Repealed by ActNo. 10 of 2012, s. 75(1)]
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Section 38 repealed by ActNo. 10 of 2012, s. 75(1).

Section 38.[Repealed by ActNo. 10 of 2012, s. 75(1)]
39
THE DEPOSIT PROTECTION FUND - 39.[Repealed by ActNo. 10 of 2012, s. 75(1).]
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Section 39 was repealed by ActNo. 10 of 2012, s. 75(1).

Section 39.[Repealed by ActNo. 10 of 2012, s. 75(1).]
39A
THE DEPOSIT PROTECTION FUND - 39A.[Repealed by ActNo. 14 of 2015, s. 43.]
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Section 39A was repealed.

Section 39A.[Repealed by ActNo. 14 of 2015, s. 43.]
40
THE DEPOSIT PROTECTION FUND - 40.[Repealed by ActNo. 10 of 2012, s. 75(1).]
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Section 40 was repealed by Act No. 10 of 2012, s. 75(1).

Section 40.[Repealed by ActNo. 10 of 2012, s. 75(1).]
40A
THE DEPOSIT PROTECTION FUND - 40A. Rights of assignment
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The liquidator may assign an institution's or customer's assets or liabilities to third parties for the benefit of creditors and depositors; public officers who have the power to register such assignments must, on request by the liquidator, customer or other person, do what is legally necessary to complete registration.

Section 40A. Rights of assignment Section 40A(1) The liquidator may assign the assets or liabilities of an institution ("a bank or financial institution or a mortgage finance company;") or of a customer under this Act, the Insolvency Act ( Cap. 53 ), or under any other written law to third parties for the benefit of the creditors and depositors of the institution under liquidation. Section 40A(2) The right of assignment conferred by this section shall override all other rights and interests of parties under contracts of employment, leases, charges, mortgages or any other agreements the institution ("a bank or financial institution or a mortgage finance company;") may have entered into before going into liquidation. Section 40A(3) Every public officer having the power or duty to accept and register or amend any entry in any register relating to an assignment of an asset or liability pursuant to subsection (1) shall, upon request made by the liquidator, customer or other person, do all such things as are by law necessary to complete the registration of the assignment. [Act No. 5 of 1998 , s. 61, Act No. 19 of 2015 , s. 88.]
41
THE DEPOSIT PROTECTION FUND - 41.[Repealed by ActNo. 13 of 1994, s. 16.]
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Section 41 has been repealed.

Section 41.[Repealed by ActNo. 13 of 1994, s. 16.]
41A
THE DEPOSIT PROTECTION FUND - 41A.[Repealed by ActNo. 10 of 2012, s. 75(1).]
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Section 41A was repealed by Act No. 10 of 2012, s. 75(1).

Section 41A.[Repealed by ActNo. 10 of 2012, s. 75(1).]
42
THE DEPOSIT PROTECTION FUND - 42.[Repealed by ActNo. 10 of 2012, s. 75(1).]
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Section 42 was repealed by ActNo. 10 of 2012, s. 75(1).

Section 42.[Repealed by ActNo. 10 of 2012, s. 75(1).]

Part X

MISCELLANEOUS PROVISIONS

44
MISCELLANEOUS PROVISIONS - 44. Restrictions on increase inbankcharges
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Banks, financial institutions and mortgage finance companies must not increase banking or other charges unless they have prior approval from the Cabinet Secretary responsible for Finance.

Section 44. Restrictions on increase inbankcharges Section No institution ("a bank or financial institution or a mortgage finance company;") shall increase its rate of banking or other charges except with the prior approval of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") .
44A
MISCELLANEOUS PROVISIONS - 44A. Limit on interest recovered on defaulted loans
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Institutions (banks, financial institutions or mortgage finance companies) are limited in what they may recover from a debtor for a non-performing loan to the amounts listed in subsection (2).

Section 44A. Limit on interest recovered on defaulted loans Section 44A(1) An institution ("a bank or financial institution or a mortgage finance company;") shall be limited in what it may recover from a debtor with respect to a non-performing loan to the maximum amount under subsection (2) . Section 44A(2)(a) the principal owing when the loan becomes non-performing; Section 44A(2)(b) interest, in accordance with the contract between the debtor and the institution ("a bank or financial institution or a mortgage finance company;") , not exceeding the principal owing when the loan becomes non-performing; and Section 44A(2)(c) expenses incurred in the recovery of any amounts owed by the debtor. Section 44A(3) If a loan becomes non-performing and then the debtor resumes payments on the loan and then the loan becomes non-performing again, the limitation under paragraphs (a) and (b) of subsection (1) shall be determined with respect to the time the loan last became non-performing. Section 44A(4) This section shall not apply to limit any interest under a court order accruing after the order is made. Section 44A(5)(a) "debtor" includes a person who becomes indebted to an institution ("a bank or financial institution or a mortgage finance company;") because of a guarantee made with respect to the repayment of an amount owed by another person; Section 44A(5)(b) "loan" includes any advance, credit facility, financial guarantee or any other liability incurred on behalf of any person; and Section 44A(5)(c) a loan becomes non-performing in such manner as may, from time to time, be stipulated in guidelines prescribed by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . Section 44A(6)(a) the principal and interest owing on the day this section comes into operation; and Section 44A(6)(b) interest, in accordance with the contract between the debtor and the institution ("a bank or financial institution or a mortgage finance company;") , accruing after the day this section comes into operation, not exceeding the principal and interest owing on the day this section comes into operation; and Section 44A(6)(c) expenses incurred in the recovery of any amounts owed by the debtor.
45
MISCELLANEOUS PROVISIONS - 45.Cabinet Secretaryto consult withthe Central Bank
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The Cabinet Secretary shall consult with the Central Bank when exercising his functions under this Act.

Section 45.Cabinet Secretaryto consult withthe Central Bank Section 45(1) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") shall consult with the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") in the exercise of his functions under this Act. Section 45(2) Where the approval of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") is required under any provision of this Act, the application for such approval shall be submitted through the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") . [Act No. 19 of 2015 , s. 91.]
46
MISCELLANEOUS PROVISIONS - 46. Bank holidays
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The Cabinet Secretary may declare a non-public-holiday day to be a bank holiday for all or specific banks/branches; banks, specified banks, or branches must remain closed on such declared days; the Central Bank may authorize institutions or branches to remain closed on application and if satisfied.

Section 46. Bank holidays Section 46(1) Where the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") considers that it is in the public interest that banks, or a particular bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , or a particular branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") of a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , should remain closed on a day which is not a public holiday, he may by notice in the Gazette , declare that day to be a bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") holiday for all banks, or for that particular bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , or for that particular branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") , as the case may be, and every licensed bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , or that particular bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") , or that particular branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") , as the case may be, shall remain closed on that day. Section 46(2) Without prejudice to subsection (1) , the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, on application by an institution ("a bank or financial institution or a mortgage finance company;") or a branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") of an institution ("a bank or financial institution or a mortgage finance company;") , if satisfied that it is necessary to do so, authorize the institution ("a bank or financial institution or a mortgage finance company;") or branch ("any permanent premises, other than its head office, at which an institution transacts business in or outside Kenya;") to remain closed on such day or part thereof, or on such days as may be specified in the authorization, subject to such terms and conditions as the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may impose. [Act No. 8 of 2008 , s. 69, Act No. 19 of 2015 , s. 92.]
47
MISCELLANEOUS PROVISIONS - 47. Orders by High Court
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The High Court may make orders that prohibit a bank, financial institution or mortgage finance company from carrying on business or stay actions or proceedings against it.

Section 47. Orders by High Court Section 47(1)(a) prohibiting the institution ("a bank or financial institution or a mortgage finance company;") from carrying on business; or Section 47(1)(b) staying the commencement or continuance of any actions or proceedings against the institution ("a bank or financial institution or a mortgage finance company;") in regard to any business for a specified period of time on such terms and conditions as it considers reasonable, Section 47(2) So long as an order under paragraph (a) of subsection (1) remains in force, the licence ("a licence granted under;") granted to the institution ("a bank or financial institution or a mortgage finance company;") under this Act shall be deemed to be suspended.
48
MISCELLANEOUS PROVISIONS - 48. Disqualification of officers
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Anyone who continues to act as an officer of a bank, financial institution or mortgage finance company after being disqualified by this section commits an offence.

Section 48. Disqualification of officers Section 48(1)(a) becomes bankrupt or suspends payment or compounds with his creditors; or Section 48(1)(b) is convicted of an offence involving dishonesty or fraud; or Section 48(1)(bb) is disqualified from holding office under section 32A ; or Section 48(1)(c) is removed from office under the provisions of section 34 . Section 48(2) Any person who continues to act as an officer of an institution ("a bank or financial institution or a mortgage finance company;") after he has been disqualified by virtue of this section shall be guilty of an offence. [Act No. 10 of 2006 , s. 46.]
49
MISCELLANEOUS PROVISIONS - 49. Penalties for offences
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A body corporate is guilty of an offence and is liable to pay a fine not exceeding one hundred thousand shillings.

Section 49. Penalties for offences Section if it is a body corporate, it shall be guilty of an offence and liable to a fine not exceeding one hundred thousand shillings; and
50
MISCELLANEOUS PROVISIONS - 50. Penalties for default by officers
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An officer who fails to take reasonable steps as described in Section 50(1)(a)–(c) commits an offence and is liable to up to one year imprisonment or a fine not exceeding twenty thousand shillings or both; an officer may rely on a defence under subsection (2) by showing he reasonably thought another competent person had the responsibility.

Section 50. Penalties for default by officers Section 50(1)(a) fails to take all reasonable steps to secure the compliance of the institution ("a bank or financial institution or a mortgage finance company;") with this Act; or Section 50(1)(b) fails to take all reasonable steps to secure the accuracy and correctness of any statement submitted under this Act or any other written law applicable to banks or financial institutions; or Section 50(1)(c) fails to supply any information required under this Act, shall be guilty of an offence and liable to imprisonment for a term not exceeding one year or to a fine not exceeding twenty thousand shillings or to both. Section 50(2) It shall be a defence to a charge under subsection (1) for an officer to show that he reasonably thought that another competent person had been charged with the responsibility or duty in respect of which the default arose.
51
MISCELLANEOUS PROVISIONS - 51. Misleading advertisement for deposits
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It describes (a) falsely representing authorization to accept deposits and (b) issuing deposit-related advertisements contrary to a Central Bank direction; and gives the Central Bank power to direct persons to withdraw, amend or refrain from issuing such materials.

Section 51. Misleading advertisement for deposits Section 51(1)(a) falsely represents that he is authorized to accept deposits or is otherwise licensed under the provisions of this Act; or Section 51(1)(b) is issued contrary to any direction given by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under the provisions of subsection (2) , Section 51(2) The Central Bank may, at any time direct any person to withdraw, amend or refrain from issuing any advertisement, brochure, circular or other document relating to deposits which, in its sole discretion, it considers to be misleading.
52
MISCELLANEOUS PROVISIONS - 52. Civil obligations
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Institutions may not recover in court interest or charges that exceed the statutory maximum set by this Act or the Central Bank of Kenya Act.

Section 52. Civil obligations Section 52(1) For the avoidance of doubt, no contravention of the provisions of this Act or the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ) shall affect or invalidate in any way any contractual obligation between an institution and any other person. Section 52(2) The provisions of subsection (1) shall apply with retrospective effect to the Banking Act (now repealed) and the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ). Section 52(3) This section shall not permit any institution ("a bank or financial institution or a mortgage finance company;") to recover in any court of law interest and other charges which exceed the maximum permitted under the provisions of this Act or the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ).
52A
MISCELLANEOUS PROVISIONS - 52A. Act to prevail in event of conflict
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If this Act conflicts with any other written law applicable to a bank, financial institution or mortgage finance company licensed under this Act, the provisions of this Act prevail, subject to subsection (2).

Section 52A. Act to prevail in event of conflict Section 52A(1) Subject to subsection (2) , where there is a conflict between the provisions of this Act and the provisions of any other written law applicable to an institution ("a bank or financial institution or a mortgage finance company;") licensed under this Act, the provisions of this Act shall prevail. Section 52A(2) For the purposes of subsection (1) , the expression "written law" does not include the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") of Kenya Act ( Cap. 491 ), the Income Tax Act ( Cap. 470 ), the East African Community Customs Management Act, the Value Added Tax Act ( Cap. 476 ) or any of the other laws set out in the First Schedule to the Kenya Revenue Authority Act ( Cap. 469 ). [Act No. 13 of 1994 , s. 17, Act No. 4 of 1999 , s. 88, Act No. 9 of 2007 , s. 66.]
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MISCELLANEOUS PROVISIONS - 53. Exemptions
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The Cabinet Secretary for Finance may, by Gazette notice, exempt a bank, financial institution or mortgage finance company from sections 12, 13 or 14 subject to conditions the Cabinet Secretary considers necessary.

Section 53. Exemptions Section 53(1) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") may, by notice in the Gazette , exempt an institution ("a bank or financial institution or a mortgage finance company;") from the provisions of section 12 , 13 or 14 subject to such conditions as the Cabinet Secretary considers necessary. Section 53(2) An exemption granted under subsection (1) shall remain in force for such period specified in the notice as the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") shall deem fit. [Act No. 4 of 1993 , s. 64, Act No. 10 of 2006 , s. 47, Act No. 19 of 2015 , s. 93.]
54
MISCELLANEOUS PROVISIONS - 54. Act not to apply to certain institutions
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Section 54 lists certain institutions that the Act does not apply to, but where any of those bodies act as an agent providing banking services for an institution the Act applies to them to the extent of the contracted services.

Section 54. Act not to apply to certain institutions Section 54(1)(a) the Kenya Post Office Savings Bank established under the Kenya Post Office Savings Bank Act ( Cap. 493B ); Section 54(1)(b) the Agricultural Finance Corporation established under the Agricultural Finance Corporation Act ( Cap. 323 ); Section 54(1)(c) a society registered as a co-operative society under the Co-operative Societies Act ( Cap. 490 ); Section 54(1)(d) a microfinance bank ("a company which carries on, or proposes to carry on,banking business in Kenya but does not include the Central Bank;") licensed under the Microfinance Act ( Cap. 493C ). Section 54(2) Notwithstanding the provisions of subsection (1) , where any of the bodies referred to in that subsection is contracted by an institution ("a bank or financial institution or a mortgage finance company;") as an agent to provide banking services on behalf of the institution ("a bank or financial institution or a mortgage finance company;") , this Act shall apply to such body to the extent of the services contracted. [Act No. 8 of 2009 , s. 61, Act No. 10 of 2010 , s. 70, Act No. 41 of 2013 , Sch.]
54A
MISCELLANEOUS PROVISIONS - 54A. Rights and fundamental freedoms
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Persons subject to the Act are entitled to enjoy all constitutional rights and fundamental freedoms, unless limited by Article 24, this Act or any other Act.

Section 54A. Rights and fundamental freedoms Section All persons subject to this Act shall enjoy all rights and fundamental freedoms enshrined in the Constitution unless limited to the extent specified in Article 24 of the Constitution, this Act or any other Act. [Act No. 10 of 2023 , Sch.]
54B
MISCELLANEOUS PROVISIONS - 54B. Limitation of right to privacy
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Limits the constitutional right to privacy.

Section 54B. Limitation of right to privacy Section 54B(1) The right to privacy guaranteed under Article 31 of the Constitution is hereby limited under Article 24 of the Constitution only to the nature and extent contemplated under subsection (2) . Section 54B(2)(a) the person’s home or property may, with a warrant, be searched; Section 54B(2)(b) the person’s possessions may be seized; Section 54B(2)(c) information relating to that person’s financial, family or private affairs where required may be revealed; or Section 54B(2)(d) the privacy of a person’s communications may be investigated or otherwise interfered with. Section 54B(3) A limitation of a right under subsection (1) shall apply only for the purpose of the prevention, detection, investigation and prosecution of proceeds of crime, money laundering and financing of terrorism. [Act No. 10 of 2023 , Sch.]
55
MISCELLANEOUS PROVISIONS - 55. Regulations
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The Central Bank may make regulations to implement this Act and may prescribe penalties (with specified maximum amounts) and additional per‑day penalties.

Section 55. Regulations Section 55(1) The Central Bank may make regulations generally for carrying out the purposes and provisions of this Act. Section 55(2) Without prejudice to the generality of subsection (1) , the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") may, in regulations, prescribe penalties to be paid by institutions, credit reference bureaus or any other person that fails or refuses to comply with any provision of this Act, Prudential Guidelines or any direction issued by the Central Bank ("the Central Bank of Kenya established by the Central Bank of Kenya Act ();") under this Act or Prudential Guidelines. Section 55(3) The penalties prescribed under subsection (2) shall not exceed twenty million shillings in the case of an institution ("a bank or financial institution or a mortgage finance company;") or credit reference bureau, or three times the gross amount of the monetary gain made, or loss avoided by the failure or refusal to comply whichever is higher; and three million shillings in the case of a corporate entity and one million shillings in the case of a natural person. Section 55(4) The Central Bank may, in regulations, prescribe additional penalties not exceeding one hundred thousand shillings in each case for each day or part thereof during which such failure or refusal continues. [Act No. 5 of 1998 , s. 62, Act No. 8 of 2008 , s. 70, Act No. 38 of 2013 , s. 29, Act No. 19 of 2015 , s. 55, Act No. 38 of 2016 , s. 53, Act No. 20 of 2024 , s. 1.]
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MISCELLANEOUS PROVISIONS - 56. Repeal and savings
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Section 56(1) repeals the Banking Act (Cap. 488); Section 56(2) preserves existing licences for banks and financial institutions by treating them as if granted under section 5 of this Act; Section 56(4) preserves agreements under repealed section 33B and allows interest rates under such agreements to be varied downwards.

Section 56. Repeal and savings Section 56(1) The Banking Act ( Cap. 488 ) is repealed. Section 56(2) Notwithstanding subsection (1) , whereupon the commencement of this Act any 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;") is licensed to transact banking business or the business of 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;") in Kenya, that licence ("a licence granted under;") shall have effect as if granted under section 5 of this Act. Section 56(3)(a) any act or thing that was done or omitted to be done by or to the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") under this Act before the commencement of the Companies and Insolvency Legislation (Consequential Amendments) Act, 2015 (No. 15 of 2015) had effect immediately before that commencement; and Section 56(3)(b) that act or thing could be done or be omitted to be done by or to the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for matters relating to Finance;") under this Act after that commencement, Section 56(4) Notwithstanding the repeal of section 33B , any agreement or arrangement to borrow or lend which was made or entered into, or varied pursuant to the provisions of that section shall continue to be in force on such terms, including interest rates, and for the duration specified in the agreement or arrangement: Provided that the interest rate chargeable under that agreement or arrangement may be varied downwards. [Act No. 19 of 2015 , s. 95, Act No. 23 of 2019 , s. 46.]
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MISCELLANEOUS PROVISIONS - 57. Amendments of other laws
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The written laws listed in the first column of the Second Schedule are amended as specified in the second and third columns.

Section 57. Amendments of other laws Section The several written laws specified in the first column of the Second Schedule are amended, in relation to the provisions thereof specified in the second column, in the manner specified in the third column.

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